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Tag Archives: cost to close

Am I Losing Money When I Buy Back My Deep In-The-Money Strike?

Recognizing successful covered call writing trades is just as important as executing them. On January 17, 2020, Mark wrote to me about a covered call trade that he was analyzing […]

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covered call writing exit strategies

Comparing the Cost-to-Close with Initial Trade Goal

When we enter our covered call trades, we make our stock and option selection based on our initial time-value return goal (2% – 4% for 1-month expirations in my case). […]

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“Hitting a Double” or “Mid-Contract Unwind Exit Strategy”: Which Exit Strategy Did I Just Use?

Mastering exit strategies is the 3rd required skill for successful covered call writing and put-selling. On November 28, 2018, Nirav wrote to me regarding a series of trades he executed […]

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covered call writing exit strategies

Understanding the “Paid-Up” Risk When Rolling Out-And-Up: A Real-Life Example with FIVE

One of our covered call writing exit strategies when the strike is in-the-money on expiration Friday is rolling out-and-up. This is when we buy back the near-month call (buy-to-close) and […]

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Rolling Out-And-Up And Then Stock Price Declines

Rolling our covered call trades involves multiple months of trading statistics. The calculations may be deceiving initially but on deeper analysis, rolling our options can represent an invaluable trading tool […]

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Factors to Consider When Closing a Trade Early: A Real-Life Example with ATVI

Exit strategies for covered call writing includes closing a trade when share price rises above the original strike price sold. When formulating these decisions, we must factor in the cost-to-close […]

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Evaluating the Success of our Covered Call Trades

Whenever a covered call trade results in a maximum return, it is a successful trade…period…end of story. To most, this statement appears nonsensical and self-evident. But I’m here to tell […]

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What Criteria Should We Use to Close our Covered Call Positions Early?

When we sell out-of-the-money call options, we are initiating bullish covered call writing positions. Our goals are to generate option premium as well as share appreciation from current market value […]

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