Jan 24, 2015 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Stock Option Strategies
Covered call writers know how important exit strategies are to our ultimate success. Position management skills must be activated when share price rises or falls dramatically and when dividends become an issue or when a strike is in-the-money as expiration of the...
Jan 17, 2015 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Stock Option Strategies
For the strategies of covered call writing and selling cash-secured puts, we are selling the right, but not the obligation, to buy or sell 100 shares of the underlying security. That security can be a stock or and exchange-traded fund (ETF). In this article, I will...
Jan 10, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Can we use covered call writing and selling cash-secured puts to generate profits when share price declines by 10% in two months in a bear or volatile market environment? I am writing this article on January 5th, 2015, the worst day the market has experienced in over...
Jan 3, 2015 | Investment Basics, Option Trading Basics, Options Trade Execution, Stock Investing, Stock Option Strategies
Covered call writing and selling cash-secured puts are conservative strategies for risk-averse retail investors. This is why I feel most of us should be trading in cash accounts (no borrowing) and sheltered accounts whenever possible. For those of us who have higher...
Dec 27, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Mastering options trading basics includes understanding the factors that impact our option premiums. The original Black Scholes pricing model was designed to evaluate European Style options which can only be exercised on expiration Friday, not earlier. Here is a brief...
Dec 20, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
A Covered combination (“combo trade”) trade is the simultaneous sale of an out-of-the-money (OTM) call and an out-of-the-money put with the same expiration date on 100 shares of a stock or ETF (exchange-traded fund). It consists of a combination of a...
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