Put–call parity is a principle that defines the relationship between the price of European put options and European call options of the same stock, strike price, and expiration date. The formula can identify arbitrage opportunities […]
Put-Call Parity and Arbitrage Opportunities
Posted on April 18, 2020 by Alan Ellman in Investment Basics, Just Alan, Option Trading Basics, Options Calculations, Stock Option Strategies
Reasons for Early Exercise
Posted on March 31, 2018 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
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 […]
Arbitrage: Part II
Posted on December 23, 2017 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
In part I of this arbitrage series we defined arbitrage as the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a […]
Arbitrage: Part I
Posted on December 16, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Understanding stock and option pricing requires an awareness of arbitrage and market efficiency. Although most retail investors do not have the tools to take advantage of arbitrage opportunities, a comprehensive understanding of […]
Moneyness of Options: Why Call and Put Premiums for the Same Stock, Strike and Expiration can be so Different/ CONTEST DEADLINE IS NOVEMBER 30th
Posted on November 28, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Option trading basics teaches us that the concept of put-call parity means that for every call option price, the corresponding put option (same stock, strike and expiration) will have an implied […]
Put-Call Parity and Synthetic Trades: Understanding Option Pricing
Posted on September 19, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell covered calls or cash-secured puts we understand the factors that go into the premiums we receive: The option’s exercise price The current price of the underlying The […]
Why Are Call Premiums Larger Than Put premiums For Near-The-Money Strikes?
Posted on June 6, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When studying covered call and put-selling option prices we learn that the market will correct any potential arbitrage opportunities. Arbitrage is the simultaneous purchase and sale of an option in […]
Exchange-Traded Funds: How They Operate: The Pros And The Cons
Posted on February 23, 2013 by Alan Ellman in Exchange-Traded Funds
Covered call writers can use individual stocks or exchange-traded funds as the underlying securities. Each has its own set of advantages and disadvantages. In this article we will explore the mechanism […]
Put-Call Parity: Understanding Option Pricing
Posted on January 26, 2013 by Alan Ellman in Option Trading Basics, Stock Option Strategies
One of the mission statements of The Blue Collar Investor is to share information so that we can master option trading basics and become better investors. Many times I will […]
S&P Futures and Fair Value.
Posted on November 24, 2012 by Alan Ellman in Investment Basics, Stock Investing
Many covered call writers start their day by tuning in to CNBC. They look to the lower right side of the TV screen and see: The S&P Futures are UP […]
Podcast
- BCI PODCAST 121: What is a SPAC (Special Purpose Acquisition Company)?
- 120. Using the Nasdaq-100 Volatility Index (VOLQ) in Covered Call Writing Decisions
- 119. Establishing Our Cost-Basis for Long-Term Holdings
- 118. Adjusting Our Portfolio Mix to Achieve Diversification and Cash Allocation
- 117. When a Covered Call Strike Moves $1000.00 In-The-Money
- 116. How to Execute a Covered Call Trade with a Buy/Write Combination Form
- 115. Establishing Our Cost Basis When Rolling-Out-And-Up On 2 Different Days
- 114. The Poor Man's Covered Call Selecting the Best LEAPS Strikes
- 113. How to Select the Best Strikes for Collar Trades
- 112. Using Covered call Options and Stock Dividends in Low Interest Rate Environments
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Beginners Corner Enhanced & Updated
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Beginners Corner Selling-Puts
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