Mar 7, 2015 | Investment Basics, Option Trading Basics, Stock Option Strategies
Stocks eligible for our covered call writing and put-selling portfolios are screened in a 3-pronged approach: fundamental analysis, technical analysis and “common sense principles” like avoiding earnings reports. One of the categories under the common...
Feb 28, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Understanding the Greeks, or factors that impact the value of our covered call premiums, is essential to mastering options trading basics and becoming an elite covered call writer. One of the Greeks (although not truly a Greek letter) is Vega, the amount an option...
Feb 21, 2015 | Option Trading Basics, Options Calculations, Stock Option Strategies, Technical Analysis
When using covered call writing and put-selling strategies it is important to set goals for initial returns in order to select the most appropriate underlying security and option. My goal for initial returns is 2% – 4% per month and a bit higher in a bull market...
Feb 14, 2015 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Covered call writing and put-selling results are enhanced by selecting the best underlying securities and most appropriate options. Stock selection involves screening via fundamental and technical analysis as well as common sense screens (like avoiding earnings...
Feb 7, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing and put-selling generates monthly cash flow because we are selling option contracts and getting paid for undertaking the contract obligations. When a contract is exercised, we then enter another phase where we either buy or sell shares. The...
Jan 31, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Understanding the concept of implied volatility is essential for successful covered call writing and selling puts. First, implied volatility gives us a window into the “market’s” perception of future price movement. It will also allow us to calculate...
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