Our approach to covered call writing and put-selling in bear markets include an arsenal of trading concepts that will enhance our opportunities for successful outcomes. These include: Use of deep in-the-money calls Use of deep out-of-the-money puts Use of lower implied volatility securities Use of low-beta stocks Use of exchange-traded funds Lowering our time value […]
Long-Term Capital Gains Enhanced with Covered Call Writing
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 stock that has substantially appreciated in value and represents a source […]
Tax Implications of Writing Covered Calls against Long-Term Holdings
Covered call writing is a short-term strategy where we sell Weekly or Monthly options to generate cash flow. It is best to use this strategy in sheltered accounts to defer or eliminate tax consequences but that is not always possible. Generally, the income from covered call writing results in short-term capital gains (losses) but there […]
Indexing: A Key Component to Successful Long-Term Investing
In my book, Stock Investing for Students, I develop a long-term investment plan to achieve financial independence and an early retirement. The plan is initiated by using broad market index funds. This article will highlight the reasons why I favor passively-managed mutual funds to their actively-managed counterparts. First, some definitions. Definitions Index fund: A type […]
What is the Best Time to Execute Our Trades?
Covered call writing and selling cash-secured puts involve buying and selling stocks and options. We work meticulously to do everything possible to throw the odds in our favor to result in successful trades. Achieving the highest level of returns in a low risk manner is one of our mission statements. I have frequently highlighted the three required […]
Evaluating the Performance of our Mutual Funds and Financial Advisors
Utilizing a portfolio of mutual fund investments is a topic I have addressed in my book, Stock Investing for Students. Investing with these securities represents a longer-term investment plan than covered call writing and selling cash-secured puts. A significant number of retail investors use financial advisors to select various mutual funds for their portfolios in hopes of generating the […]
Reverse Splits and Unreliable Options Chains
Stock splits are corporate events where the number of shares in circulation changes as well as the price -per-share. If we own 100 shares at $50.00 per share pre-split and the stock splits 2-for-1, then we will own 200 shares at $25.00 post-split. The value of our position ($5000.00) does not change. What is […]
GAAP versus Non-GAAP Earnings: Challenges of Fundamental Analysis
Fundamental analysis is the first step when screening stocks for covered call writing and put-selling. Years ago I actually read the financial statements of companies I was interested in. I eventually came to the conclusion that this was an exercise in futility as it was time-consuming and, in many cases, difficult to confirm the accuracy of […]
What Are Wash Sales And Wash Trading? Are They The Same?
Covered call writing and put-selling involve the buying and selling of stocks and options. When executed in non-sheltered accounts, taxable events are created. Since the BCI community is populated with savvy investors, the topic of wash sales has come up frequently and some have used the term wash trading interchangeably with wash sales. This article will discuss […]
Capital Gains (Losses) For Selling Cash-Secured Puts In Non-Sheltered Accounts
In a recent article, tax implications for covered call writing was discussed. In this publication I will highlight the tax ramifications as they apply to selling put options. What is a Capital Gain? A capital gain is an increase in the value of as capital asset, such as a stock or an option that gives […]
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Rolling Out-And-Up: Explaining the “Bought-Up” Value of our Stocks
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In-The-Money Call Strikes: Intrinsic Value Protects Time Value
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The Covered Strangle: Selling Both Call and Put Options while Owning the Underlying Stock
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Ask Alan #146 – “The Cost of Rolling Out and UP”
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What Criteria Should We Use to Close our Covered Call Positions Early?
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The New Stock Market- Algorithmic and High Speed Trading
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Options That Expire Weekly and Conventional Expiration Cycles
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Why the 3% Guideline Applies to Puts but Not to Call Options
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Earnings Pre-Announcements Explained and Categorized
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Tax Implications of Writing Covered Calls against Long-Term Holdings
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Barry B Premium Members, This week's Weekly Stock
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Roni Mario, you are totally right about being carefu
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Jay Hi Duminda, As the name implies if you "co
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Alan Ellman Duminda, Protective puts (called a "collar
- Rolling Out-And-Up: Explaining the "Bought-Up" Value of our Stocks | The Blue Collar Investor […] Store […]
