Oct 14, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies, Stock Trading & Taxes
Covered call writing can be crafted to meet a multitude of trading styles, goals and personal risk tolerances. In this article, I will highlight yet another situation where we may utilize this great strategy. In this common hypothetical, we are preparing to sell a...
Oct 7, 2017 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When selling cash-secured puts our position management skills include buying back the short puts under certain circumstances. These include situations when share price moves up or down dramatically. When share price declines below the breakeven, we start losing money....
Sep 30, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Never sell a covered call or cash-secured put option if there is an upcoming earnings report prior to contract expiration. I have been emphasizing this rule for over a decade in my books, DVDs, seminars and videos. There are times, however, when we have confidence in...
Sep 23, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell a covered call and share price rises dramatically, there is a tendency to roll up in order to capture additional future share appreciation. The most common reason for a gap-up in price is a favorable earnings report. In mid-May 2017 Tim wrote me about a...
Sep 2, 2017 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, paper trading, Stock Option Strategies
Using covered call writing and exchange-traded funds (ETFs) is a viable approach to generating monthly cash flow. I personally use this strategy in my mother’s portfolio. Can this investment style be expanded to include inverse ETFs to move this expanded path to...
Aug 19, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell an in-the-money covered call, we are taking a defensive posture and using the intrinsic value component of the premium to protect the time value initial profit. As an example, let’s look at New Oriental Education (NYSE: EDU) on April 7, 2017: EDU...
Podcast