Comments on: Rolling Out-And-Up: 6-Week Returns https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/ Learn how to invest by selling stock options. Tue, 20 Oct 2020 19:20:36 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-343325 Tue, 20 Oct 2020 19:20:36 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-343325 In reply to Nancy.

Nancy,

If we decided to retain AGN for the next contract month and we rolled-out-and-up to the $125.00 strike, we enter a BTC limit order for $0.80 (20% guideline) and manage from there.

Alan

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By: Nancy https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-343323 Tue, 20 Oct 2020 16:16:28 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-343323 Alan,

I just wanted to follow up regarding this article. Could you please let me know how we can proceed along with price.

Cheers
Nancy

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By: Alan Ellman https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-338859 Thu, 08 Oct 2020 09:55:59 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-338859 In reply to Ahmed.

Ahmed,

A 1-day covered call trade does not align with our BCI methodology. That said, strike selection in all covered call trades is based on our initial time-value return goal range and expiration date should be short-term in your strategy as this will allow for greatest benefit from Theta or time-value erosion.

I would strongly encourage paper-trading before embracing this approach.

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-338846 Thu, 08 Oct 2020 09:25:53 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-338846 In reply to Sunny.

Sunny,

The price of the short call has the ex-date already factored in. Holders of LEAPS do not receive the dividend and share price does drop by $0.50 on the ex-date. We also have a long-term commitment to this trade. So, do we close the long LEAPS position because of this? No.

We enter a PMCC trade with the understanding that there are pros and cons to this strategy. Not receiving dividends is one of the cons. If we closed the long LEAPS, we would also have to close the short call to avoid a naked options position which our broker would, most likely, not allow anyway. We plan to hold the LEAPS for 1 – 2 years so closing the entire trade 4 times per year is not a practical application of the strategy. The $0.50 4 times per year pales in comparison to the decreased cost-basis enjoyed by using LEAPS instead of the stock.

Alan

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By: Ahmed https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-338858 Thu, 08 Oct 2020 05:12:03 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-338858 Hi Alan,

I hope you doing well!

Thank you for your youtube videos, I really appreciate the informations you provided.
I have one question about selling covered call, lets say i’m just interested in the next day trade, only next day, and I wanna buy 100 shares of stock X and same time sell one covered call option before the market close, so scenario #1 the stock go up 2% in the next day I close all my positions and exit with profit, scenario #2 the stock fall 2% I close all my positions and exited with more softer lost. For this type of strategy which strike and expiration date is best for my situation?

Many thanks!

Kind regards,
Ahmed

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By: Alan Ellman https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-338776 Wed, 07 Oct 2020 21:18:54 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-338776 BCI Community:

I was asked to be one of the keynote speakers to kick off the Wealth365 Summit this Monday October 12th.

I am pleased to announce that I will be hosting 2 unique webinars that first day of the event, 10 AM ET and 7 PM ET.

Barry will be responding to your written question while I’m presenting.

Here is the link to reserve your free pass to this event:

https://summit.wealth365.com/alan-ellman/

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/rolling-out-and-up-6-week-returns/#comment-338775 Wed, 07 Oct 2020 21:13:57 +0000 https://www.thebluecollarinvestor.com/?p=19135#comment-338775 Premium members:

This week’s 4-page report of top-performing ETFs and analysis of the top-3 performing Select Sector SPDRs has been uploaded to your premium site. One and three-month analysis are included in the report. Weekly option and implied volatility stats are also incorporated.

The mid-week market tone is located on page 1 of the report.
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

Alan and the BCI team

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