Nov 14, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
LEAPS are long-term options that have expiration dates between nine months and two and a half years out. The term is an acronym for Long Term Equity AnticiPation Securities. Once the expiration date is less than nine months away, LEAPS convert to conventional options....
Nov 7, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we write covered calls or cash-secured puts, we are selling volatility. The time value component of a short-term option premium reflects the amount of time until expiration plus the volatility of the underlying security. Since most of us are comparing options...
Oct 31, 2015 | Option Trading Basics, Options Calculations, Stock Option Strategies
A covered call writing-like strategy involves buying deep in-the-money LEAPS options and then selling short-term slightly out-of-the-money call options. Leaps become a stock surrogate. The term Leaps stands for Long Term Equity AnticiPation Security. They have...
Oct 24, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Volatility is a key consideration for both stock selection and option-selling decisions. Despite its relevance to our covered call writing and put-selling selections, volatility does have its limitations and we must fully understand how we can best take advantage of...
Oct 17, 2015 | Investment Basics, Option Trading Basics, Stock Option Strategies
In Part I of this series, we discussed mergers involving cash settlement only. These events do impact our covered call and put-selling positions. In this article we will highlight mergers that involve both cash and stock and demonstrate how these corporate events can...
Oct 10, 2015 | Investment Basics, Option Trading Basics, Stock Option Strategies
Contract adjustments will change our covered call writing and put-selling positions. In the past, I have written about the effect stock splits and dividends have on our positions. In this article, I will highlight another cause of these adjustments, mergers and...
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