May 27, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
A covered call trade can be initiated by first purchasing the underlying stock or exchange-traded fund (ETF). It can also be launched by first selling an out-of-the-money (OTM) cash-secured put and allowing exercise if the put strike is in-the-money (ITM) at...
May 13, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Many assume that covered call writing is a zero sum game because we have traders executing equal but opposite trades using the same underlying security. As a covered call writer, we may sell 5 contracts of AAPL which means there is a buyer out there who just bought...
May 6, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Many consider covered call writing and selling cash-secured puts the same strategy with the same risk-reward profiles. To me, they are similar with slight differences that must be understood to make a decision as to which strategy to favor. In the end, it will be like...
Apr 29, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Never write a covered call or sell a cash-secured put if there is an earnings announcement due prior to contract expiration. This is such an important rule in the BCI methodology. However, we all know that life is not perfect and sometimes we are thrown the proverbial...
Apr 22, 2017 | Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writers must factor in dividends into our investment strategies. More specifically, ex-dividend dates for these are the dates shareholders must own the shares to benefit from the dividend distribution. Call buyers must exercise the option prior to the...
Apr 15, 2017 | Exchange-Traded Funds, Investment Basics, Stock Investing, Stock Option Strategies
A key mission statement of The Blue Collar Investor is to “become CEO of your own money” A new rule issued by the US Department of Labor highlights why this is so important. In the past, stock brokers were not required to put the best interest of their...
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