Comments on: Covered Call Writing, Leveraged ETFs, Weekly Options and Protective Puts https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/ Learn how to invest by selling stock options. Wed, 27 Sep 2017 12:17:56 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-128886 Wed, 27 Sep 2017 12:17:56 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-128886 In reply to Sankar.

Sankar,

Yes, the strategy can be continued in this manner but our cost basis will increase. See my comments under the TNA chart:

“To avoid assignment we can buy back the option but that is a debit not accounted for in the original trade proposal. If we allow assignment we would have to repurchase the security at a higher price also incurring an additional, unaccounted for debit”.

Alan

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By: Sankar https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-128804 Wed, 27 Sep 2017 03:42:35 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-128804 Good strategy Alan.

Thanks for publishing such a wonderful content on your website.

Just wanted to share my idea on the concerns you published:

On the upside, if the stock gets assigned. Buy TNA stock again and continue the strategy..

Won’t it work..I think it will work the way you described even after assignment or early assignment.

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-17134 Tue, 15 Oct 2013 10:04:08 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-17134 In reply to Fred.

Fred,

The trend is definitely for more and more stocks and ETFs with weeklys as the public is demanding these products. There has also been the introduction of “minis” for more expensive stocks like GOOG and AMZN where there are 10 instead of 100 underlying securities per contract. Stay tuned.

Alan

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By: Fred https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-17133 Tue, 15 Oct 2013 07:44:17 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-17133 If weekly options do become part of the BCI system then I think I would definitely want to try this product type in the future. Hope more stocks become available for it first! thanks

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-17125 Mon, 14 Oct 2013 10:52:04 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-17125 In reply to Fred.

Fred,

The BCI team is working on incorporating weeklys into our methodology. The 20/10% guideline will not apply. Here are my intial conerns with the caveat that weeklys will be part of the methodology for those members interested (we do include a list of ETF with weeklys in our weekly ETF Reports):

1- The pool of stocks with weeklys is limited (although growing)
2- Less time for exit strategy execution
3- Quadruple the commissions

Stay tuned for more information on weeklys.

Alan

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By: Fred https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-17114 Sun, 13 Oct 2013 02:53:47 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-17114 Alan, I got some questions they’re a bit late, but about the weekly options which sound quite lucrative, if I do ever feel good enough to use them.
– First if I decided to use weekly options then do all your exit strategies apply to these one week contracts too?
– If the exit strategies do apply, then how would I then use the 20% /10% rule in this case?
– If there is more monitoring needed(which I presume there is), then should I need an alert system for this?
– Also what type of chart or charts should I use for viewing?
Hope you can reply back. thanks

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By: Marc Gavazzi https://www.thebluecollarinvestor.com/covered-call-writing-leveraged-etfs-weekly-options-and-protective-puts/#comment-17019 Mon, 07 Oct 2013 13:28:34 +0000 http://www.thebluecollarinvestor.com/?p=8586#comment-17019 Hi! Alan
Thanks for discussing my strategy.
You are right with the upside vulnerability, so I got a new idea.
Now I add an out of the money call to the weekly trade, so if TNA increase in price I participate also to he upside. Of course the purchase of the call must be less than the premium I got selling the TNA call.
If TNA goes south I can buy the covered call back and sell a new generating more premium, getting back the money I spent to acquire the out of the money call.

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