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Tag Archives: Cash-secured puts

BCI PODCAST 100: Analyzing LEAPS for The Poor Man’s Covered call Strategy (PMCC)

Watch Video: Listen To Audio Version: The PMCC allows investors to enter a covered call at a much lower cost than traditional covered call writing. There are pros and cons to this strategy. This podcast will detail how to use Delta to assist in the selection of our long LEAPS position. What is the best […]

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Creating a Portfolio of Weekly Cash-Secured Puts

Selling cash-secured puts is a strategy similar to, but not precisely the same, as covered call writing. In February 2020, Chevy wrote to me asking for an article or video addressing weekly cash-secured puts, a strategy he was using and looking to enhance.   The 3-required skills Whether we are selling calls or puts and […]

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put-selling calculator

Covered Puts Are NOT Cash-Secured Puts

Selling cash-secured puts is one of the go-to strategies in the BCI methodology. There has been some confusion for some of our members who conflate this strategy with covered puts, a completely different strategy. This article will define and compare the two strategies.   Selling cash-secured puts defined A put option (generally out-of-the-money) is sold […]

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selling cash-secured puts calculations

Selling Cash-Secured Puts to Lower Cost basis

Selling cash-secured puts can be used to generate monthly cash flow and to buy a stock at a discount. It can also be used to lower the cost-basis of shares already owned. In November 2018, John shared with me a trade he was in with Halliburton Company (NYSE: HAL) using precisely this strategy. This article […]

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put-selling calculations

Selling In-The-Money Puts to Generate Higher Premiums: Evaluating a Real-Life Trade

Selling Cash-Secured Puts can be used to accomplish several goals; Generate cash flow Buy a stock at a discount Used as part of a multi-tiered option selling strategy along with covered call writing (PCP strategy) Our strategy goal along with overall market assessment, chart technicals and personal risk tolerance will ultimately guide us to the […]

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covered call writing and puit-selling comparisons

Comparing Similar Covered Call Writing and Put-Selling Positions

Covered call writing and selling cash-secured puts are similar strategies that do have certain differences. In my book, Selling Cash-Secured Puts, Figure 68 on page 214 highlights the similarities and differences between these two strategies. In this article, I will show a real-life example of how analogous positions in each strategy frequently will yield similar […]

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selling cash-secured puts

The CBOE S&P 500 PutWrite Index (PUT): An Explanation and Evaluation of Lessons Learned

The PutWrite Index (“PUT” or “$PUT)  is an index created by the CBOE (Chicago Board options Exchange) which acts as a benchmark index that measures the performance of a hypothetical portfolio that sells S&P 500 Index (SPX) put options against collateralized cash reserves held in a money market account. It is similar to the “BXM” […]

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Put-selling on ETFs

Using Puts and SelectSector SPDRs to Create an Ultra-Conservative Option-Selling Strategy

Selling out-of-the-money puts and using top-performing SelectSector SPDRs can be combined to design an extremely defensive option-selling strategy in a volatile market environment like we are currently experiencing. Using Inverse Exchange-traded Funds is another approach. In this article, we will discuss the former strategy,.  When we sell an out-of-the-money cash-secured put we are agreeing to […]

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option-selling decisions based on implied volatility

Implied Volatility of ETFs and our Covered Call Writing and Put-Selling Decisions

Covered call writers or cash-secured put sellers who use ETFs (as opposed to individual stocks) tend to be novice put writers, more conservative investors, or have limited funds or time. If you fall into any of these categories, knowing your risk level is critical to your investment decisions and specifically, to which underlying securities you […]

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