Comments on: Index Options And Exchange-Traded Funds Options: A Comparison https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/ Learn how to invest by selling stock options. Tue, 16 Sep 2014 22:21:10 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20781 Tue, 16 Sep 2014 22:21:10 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20781 Premium members:

This week’s 8-page report of top-performing ETFs and analysis of ALL Select Sector Components has been uploaded to your premium site. The report also lists Top-performing ETFs with Weekly options as well as the implied volatility of all eligible candidates.

For your convenience, here is the link to login to the premium site:

http://www.thebluecollarinvestor.com/member/login.php

NOT A PREMIUM MEMBER? Check out this link:

http://www.thebluecollarinvestor.com/membership.shtml

I am currently in Milwaukee, Wisconsin and hope to see local BCI members at my seminars in Madison and Brookfield on Wednesday and Thursday, the 17th and 18th of this month.

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20775 Mon, 15 Sep 2014 11:35:23 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20775 In reply to Petr.

Petr,

It sure is. Strike price diversification is a sound approach to cc writing when selling multiple contracts on the same underlying. If your overall market assessment is bullish and chart technicals are positive, we are more likely to favor OTM strikes and vice-versa. Personal risk tolerance also plays a role. At the end of my weekly blog articles I share my current strike price diversification based on my overall market assessment and my personal risk-tolerance.

Good point.

Alan

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By: Petr https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20774 Mon, 15 Sep 2014 11:28:38 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20774 Hi Alan,

What if I buy a stock (e.g.) BX & 32,37 and sell ITM @ 32 and OTM @ 33 in the same time.

Isn’t it a kind of diversification ?

Thanks for your opinion.

Petr

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By: Barry B https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20770 Sun, 14 Sep 2014 23:38:34 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20770 Premium Members,

The Weekly Report for 09-12-14 has been uploaded to the Premium Member website and is available for download.

Also, be sure to check out the latest BCI Training Videos and “Ask Alan” segments. You can view them at The Blue Collar YouTube Channel. For your convenience, the BCI YouTube Channel link is:

http://www.youtube.com/user/BlueCollarInvestor

Best,

Barry and The BCI Team

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By: Len Petry https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20767 Sun, 14 Sep 2014 17:15:21 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20767 Two additional (and major) differences between ETFs and the underlying indexes are:

The ETFs have more volume, and so the bid-ask spreads are narrower; the indexes can be harder to trade (especially if you want to exit the position early).

Index options cannot be exercised early. This eliminates a major and potentially unpleasant surprise. If you do spreads or condors, having one of the short strikes exercised early could be quite negative financially. With calls, the consequence are not so severe.

I believe that index options can be traded on the Saturday after Friday expiration. If so, taking action on the Friday, assuming the option had expired, could be premature.

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By: Alan Ellman https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20762 Sat, 13 Sep 2014 23:35:17 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20762 In reply to Chris.

Chris,

The report we use the most is the one immediately after expiration Friday. However, there are times we will close one of our positions with one of the exit strategies detailed in my books/DVDs. In those situations we want our members to select a replacement security using the most up-to-date information and so we screen our stocks weekly.

Alan

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By: Chris https://www.thebluecollarinvestor.com/index-options-and-exchange-traded-funds-options-a-comparison/#comment-20761 Sat, 13 Sep 2014 21:00:19 +0000 http://www.thebluecollarinvestor.com/?p=10224#comment-20761 Alan,

I know there must be an obvious answer to this but curious why you publish weekly stock reports but recommend monthly options. I’m enjoying my membership and really excited about learning all about options.

Thank you!

Chris

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