Comments on: Covered Puts Are NOT Cash-Secured Puts https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/ Learn how to invest by selling stock options. Sun, 01 Sep 2019 11:30:13 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222680 Tue, 13 Aug 2019 11:18:24 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222680 In reply to Sunny.

Sunny,

I roll in 2 steps for the very reason you stated. We can leverage the “Show or Fill Rule” more effectively for better pricing. There may be scenarios with certain brokerages (depending on its commission structure) to roll with one net credit or debit limit order.

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222677 Tue, 13 Aug 2019 11:10:11 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222677 In reply to Dietmar.

Dietmar,

I firmly believe that we can consistently beat the market with both Weeklys and Monthlys. This applies to both stocks and ETFs. My personal preference is for Monthlys. See the file in our member site (resources/downloads section) on the pros and cons of Weekly options (scroll down to “W”).

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222530 Mon, 12 Aug 2019 18:45:34 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222530 See one of my San Francisco presentations live this Saturday. To register for free click here:

https://conferences.moneyshow.com/moneyshow-san-francisco/live-stream/registration/?scode=047697

CLICK ON IMAGE TO ENLARGE & USE THE BACK ARROW TO RETURN TO BLOG.

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222512 Mon, 12 Aug 2019 16:39:38 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222512 In reply to Scott.

Scott,

A 67% annualized return is highly unlikely. I’ve come close to 50% a few times in 25 years of selling options and those were in strong bull market environments.

However, we should beat the market every year and the reason is that by selling options against our shares, we are lowering our cost-basis (breakeven). Mastering the 3-required skills will elevate our returns to the highest possible levels.

Downside protection for covered call writing includes using in-the-money strikes and protective puts. We can also sell out-of-the-money puts before entering our covered call positions. All this information is detailed in my books and DVDs.

The inverse QQQ Fund (PSQ) is appropriate for strong and confirmed bear markets. I do not believe we are even close to being there now but for those who do, this security would be a great choice to consider.

Keep up the good work.

Alan

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By: Dietmar https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222505 Mon, 12 Aug 2019 15:57:14 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222505 Hi Alan,

just a quick question: When selecting options for ETFs, do you stick to the one month time frame, or do you go shorter, for instance 1 week?

Thanks for your attention.

Regards
Dietmar

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By: Sunny https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222501 Mon, 12 Aug 2019 15:46:21 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222501 Alan,

When you roll options do you buy back and sell new in 2 separate orders, or do you use ‘buy/write’ as a single order?

I always had some cash reserve in my trading account and used to roll options in 2 separate orders placed within few seconds, but I’m not sure if this is correct. I noticed that when submitting separate orders you can get filled at slightly better price. I use ‘midpoint’ of bid/ask price and it gets filled very often with separate orders, but with single orders in most cases it doesn’t go through. However comissions seems to be lower when using single ‘buy/write’ order.

What are advantages/disadvantages of these two in your opinion?

Sunny

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By: Scott https://www.thebluecollarinvestor.com/covered-puts-are-not-cash-secured-puts-our-best-ever-covered-call-writing-streaming-dvd-program-with-50-discount-coupon/#comment-222497 Mon, 12 Aug 2019 14:47:04 +0000 https://www.thebluecollarinvestor.com/?p=18126#comment-222497 Hello Alan,

Love your newsletter! Thank you for your teachings.

Question.

I’ve been selling slightly out of the money covered calls about 7-days out on $150,000 in my IRA on stocks AAPL, STZ, MFST, V, HD & PM.

It’s been going great so far! I’m earning about $20-$30 per day in 10 contracts. That’s almost $100K a year in premium! What’s the catch? (is this sustainable?)

Question.

Is there anyway to protect our downside using this strategy?

Should I hold 30% cash? Buy the inverse QQQ fund?

Thanks for your help.

Scott

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