When we write a covered call option we are obligated to sell our shares at any time from the option sale to contract expiration if the option buyer decides to take possession of our shares. This is because we are dealing with American Style options. European Style options (apply mainly to indexes, not stocks) can […]
Reasons for Early Exercise
Our covered call writing and put-selling options can be exercised at any time from the moment we sell these options until 4 PM ET on expiration Friday. This is the definition of American Style Options, the type associated with our stocks and exchange-traded funds. Early exercise (prior to contract expiration) is rare because option holders […]
Index Options And Exchange-Traded Funds Options: A Comparison
Writers of covered calls and cash-secured puts use stocks or exchange-traded funds as the underlying securities. It is the value of these securities that give value to our option premiums. For example, we will buy back an option when share price moves down causing the corresponding option to decline in value as well. We may […]
Early Exercise: I Don’t Want To Sell My AAPL Shares
Covered call writing obligates us to sell our shares to the option buyer at any time up to 4PM ET on expiration Friday should the buyer choose to exercise those options. That is the definition of American Style options, the type we are dealing with when selling options against stocks and ETFs. The buyer is in […]
Early Exercise and Assignment of Options
When we sell a covered call option, we are undertaking an obligation for which we are well paid. Should the option holder decide to exercise that option, we must sell our shares at the specified strike price at or prior to the expiration date. This is the nature of American style options as opposed to […]
Podcast
- 80. Using the VIX to Achieve Higher Option-Selling Returns
- 79. Adjusting Target Goals with ETFs
- 78. REITS: Good Covered Call Writing Candidates?
- 77. Buyers Have Rights and Sellers Have Obligations- Covered Call Writing Explained
- 76. 5 Top Myths and Misunderstandings about Covered Call Writing
- 75. Reverse Stock Splits Understanding Contract Adjustments
- 74. Strike Selection Using Technical Analysis and Market Assessment
- 73. Mid Contract Unwind Exit Strategy at the End of a Contract
- 72. Rolling Covered Call Options on Expiration Friday
- 71: Dividend Yield Should Be a Secondary Factor for Covered Call Writing
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