Alan answers a question posed by Doug, who asks: Alan,Alan, I’m having trouble with the following trade: On 6/10 I bought GDX for $22.37 and sold the July $24 strike for $0.24. On 7/12 GDX is at $26.21 and the cost to buy back the option is $2.21 (no time value left). I want to […]
Generating 2% – 4% in Bull Markets: How to Take Advantage of Out-Of-The-Money Strikes
The 3 required skills for covered call writing and selling cash-secured puts are stock selection, option selection and position management. This article will use real-life examples highlighting the first 2 of these skill sets in a bull market environment. Article assumptions and guidelines Portfolio is set up in a bull market environment Target goals […]
Spin-offs and How they Impact Option Chains and Calculations
Corporate events can impact our covered call writing and put-selling positions in many ways. In today’s article we will focus on spin-offs and how to read an options chain after the event and calculate to moneyness of our options based on the specifics of that event. Thanks to one of our members, Richard V., who shared […]
How to Use Weeklys and the Premium Stock Reports for Covered Call Writing During Earnings Season
One of the three required skills for covered call writing and put-selling is the selection of the underlying security. Along with this we also must avoid quarterly earnings reports. Since most corporations report earnings in similar time frames (known as earnings season) the number of eligible candidates is dramatically reduced during these time frames. The […]
2016 New Year’s Greeting & Resolutions from The Blue Collar Investor
Alan Ellman reviews his resolutions and the positives for BCI, and continues on towards expectations for 2016: ” This year’s resolution is being thankful for all the support of the BCI community and team. I realize that I could have never done this without your support, thank you because of you my dream has been […]
Emergency Management Report: Dealing with Volatile and Bearish Markets:Re-Publication
I am re-publishing this article due to the extreme nature of market behavior this week, something we have come to experience periodically. It is important to re-act non-emotionally until our market stabilizes which it always does. Over the weekend I will also publish the blog article I have been working on this week. Stay calm! […]
Implied Volatility of ETFs and our Covered Call Writing and Put-Selling Decisions
Covered call writers or cash-secured put sellers who use ETFs (as opposed to individual stocks) tend to be novice put writers, more conservative investors, or have limited funds or time. If you fall into any of these categories, knowing your risk level is critical to your investment decisions and specifically, to which underlying securities you […]
Evaluating Brokerages And Comparing Their Commissions
Options trade executions include a discussion of the levels of trading approval needed to use various options strategies. You will recall that these defined levels will vary slightly from one brokerage to another. Here is a chart reviewing a sample of these trading levels: In this article, I will review the commission structure of some […]
Why Use Technical Analysis: An Example Of A Complete Technical Breakdown
Technical analysis or fundamental analysis…which should we use in the stock selection process for covered call writing? Many sophisticated investors can make an impressive argument for one or the other. I say why not use both? As most of you know, in the BCI methodology we use actually three types of screens: fundamental analysis, technical […]
