There is a new options product that will begin trading on March 18th which has the potential to add great flexibility to our covered call writing strategy. They are called mini options and I’m excited to present this information to you because the product is geared to average retail investors (aka Blue Collar Investors) like […]
The 10 Most Common Mistakes Made By Covered Call Writers And How To Avoid Them
Your neighbor bursts into your house and exclaims “I just read this article…You buy a stock and sell an option and cash flows into your account instantly. It’s a miracle! I’m getting started tomorrow” If you are a good neighbor and knowledgeable about covered call writing you will immediately tie him to a chair, put tape over […]
Inverse Exchange-Traded Funds and Covered Call Writing
Last month I published an article titled Complex and Leveraged Exchange-Traded Funds. I discussed the goals and risks associated with many of these products. One of the topics examined was Inverse Exchange-Traded Funds. Here is a brief review: Inverse ETFs use derivatives to bet against the direction of financial markets. These are known as short or […]
Put-Call Parity: Understanding Option Pricing
One of the mission statements of The Blue Collar Investor is to share information so that we can master option trading basics and become better investors. Many times I will research and write an article based on inquiries from our members and that is why I am able to continue to write weekly articles year […]
Complex and Leveraged Exchange-Traded Funds
With more and more Blue Collar Investors using online discount brokers as their trading platforms the need to be aware of the risks of complex and leveraged exchange-traded funds has become critical. Buyer beware! Covered calls can be written on many of these securities but is the risk justified? First let’s review some definitions previously discussed […]
Early Exercise and Assignment of Options
When we sell a covered call option, we are undertaking an obligation for which we are well paid. Should the option holder decide to exercise that option, we must sell our shares at the specified strike price at or prior to the expiration date. This is the nature of American style options as opposed to […]
Why Some In-The-Money Strikes Are NOT Exercised; A Real Life Example
When studying the basics of option investing we learn that the option holder of an in-the-money strike has a certain amount of intrinsic value which appears to be profit that would never be bypassed. For example, if we (as covered call writers) sold a $50 call and the stock was trading @ $52 @ 4PM […]
What Is Slippage And How Does It Impact Our Trading Success?
When studying investment basics, the term slippage has two applications. In general, it means having a trade executed at a price less favorable to the trader. Let’s look at the two areas where we may see this term used: An order is executed at a worse-than-expected price Stock and options Slippage occurs when there is […]
Portfolio Overwriting- Selling Covered Calls on Stocks You Want to Keep.
For covered call writers the main stock option strategy is to purchase an equity specifically for the purpose of selling the corresponding call option. The investment time frame is one to two months as earnings reports will end the “run” of even the best performing equities (if you agree with my guidelines). In many cases share assignment is […]
Covered Call Writing and Exchange-Traded Funds
A critical requirement of my covered call writing system is to be properly diversified by stock, industry and cash allocation. No one stock or industry should represent more than 20% of your portfolio holdings. Owning five different stocks in five different industries would require you to own at least 500 shares since each options contract […]
-
Rolling Out-And-Up: Explaining “Bought-Up” Value
-
Interpreting Exit Strategy Calculations Versus Final Calculations
-
Ask Alan #160 – Comparing Protective Puts and Position Unwinding as Strike Moves Deep In-The-Money
-
Covered Call Writing with a Biotech Company: A Real-Life Example with Argenx (NASDAQ: ARGX)
-
In-The-Money Covered Calls: Intrinsic Value Protects Time Value: A Real-Life Example with TEAM + New Tool Coming Soon
-
The New Stock Market- Algorithmic and High Speed Trading
-
Options That Expire Weekly and Conventional Expiration Cycles
-
Why the 3% Guideline Applies to Puts but Not to Call Options
-
Earnings Pre-Announcements Explained and Categorized
-
Tax Implications of Writing Covered Calls against Long-Term Holdings
-
Jay Hoyt, Please enjoy a nice time at the Biergarte
-
Hoyt T Jay, Getting ready to go to the Biergarten. Had
-
-
Roni Thank you again Jay, you are a good and dear frien
-
