Nov 7, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
When we add a protective put to our covered call trades the strategy is known as a collar. To reduce the monthly cost of the long put, some investors will consider using longer-term put expirations This article will explore the pros and cons of this approach using...
Oct 24, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing is a low-risk, cash-generating strategy. We can lower the risk to an even greater extent by purchasing protective puts and by writing in-the-money (ITM) call options. Now, buying protective puts (called the collar strategy when used in conjunction...
Aug 8, 2020 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Most investors view covered call writing as a singular strategy where we buy a stock and then sell an option leveraging that security. In reality, educated option-sellers realize that one of the most remarkable advantages of using this strategy is that it can be...
Dec 15, 2018 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Covered call writing, when combined with protective puts, is known as the collar strategy. The maximum gain is established by the short call strike while the maximum loss is defined by the long put strike. For example, if a stock is purchased for $48.00 per share and...
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