Position management is the 3rd required skill for achieving the highest level of option-selling success. One of the most important of the BCI protocols for covered call writing are the 20%/10% guidelines which assists us is closing short calls when those opportunities are presented. This allows us to mitigate situations when share price declines. These […]
Managing In-The-Money Strikes When Share Price Moves Higher
When we sell in-the-money call options, we are generating initial time-value profit that meets our stated goals plus creating downside protective of that time-value profit in the form of intrinsic -value. The disadvantage of these options is that we do not benefit from share appreciation because of our contract obligation to sell at the lower […]
Rolling Decisions on Expiration Friday: A Real-Life Example with Veeva Systems
Position management is the 3rd required skill for our covered call writing and put-selling success. On 7/19/2019, Larry shared with me a series of trades he executed with Veeva Systems Inc. (NYSE: VEEV). He astutely “hit a double” and was now looking to roll the option to the following month. Larry’s trades and inquiry (in […]
“Hitting a Double” with XBI: Earn $100 in Four Minutes
Position management (exit strategies) is one of the 3-required skills for successful covered call writing and put-selling. “Hitting a double” involves buying back the short call using our 20%/10% guidelines and then re-selling that same option when share price recovers. On 3/13/2019, Mario was kind enough to share with us his trades with SPDR S&P Biotech […]
Blackjack and Covered Call Writing: Throwing the Odds in Our Favor with PayPal Holdings Inc. (NASDAQ: PYPL)
Covered call writers and all investors using stock options strategies have one thing in common: we all want to achieve the highest possible returns within the framework of our own personal risk tolerance. The focus of this site and The Blue Collar Investor is to provide the education and to share ideas that will help […]
Interpreting Exit Strategy Calculations Versus Final Calculations
Mastering option calculations is an essential skill needed to attain the very highest covered call writing returns. Although the Ellman Calculator will do most of the heavy lifting for us, understanding the reasons behind these calculations and when and how to apply them, will make us all more skilled investors. Recently a BCI member sent […]
Combining Covered Call Writing and the Stock Repair Strategy
One of our covered call writing exit strategies is converting dead money to cash profits (CDMCP). When share price is declining and under-performing the overall market, we first close the short call and then sell the stock. The cash generated from the sale of the underlying is then used to enter a new position. Another […]
Using The Ellman Calculator to Monitor “Hitting a Double” Results
One of our BCI covered call writing exit strategies is titled “hitting a double” This opportunity arises when share price declines after a covered call position is opened, short calls are bought back using our 20%/10% guidelines and then the same option is re-sold when share price rises. This article will highlight how to use […]
Timing Our Covered Call Trades: Joanna’s Tale of “DOH”
When entering our covered call trades with new positions, we buy the stock and immediately sell the option. This can be accomplished by legging-in or using a buy-write combination form. This is an important guideline because we will be assured of capturing our initial time value return goals. On August 6th, 2018, Joanna shared with […]
Multi-Leg Option Trades: Understanding Calculations and Results
Covered call writing involves a minimum of 2 legs: we are long the stock (own the stock) and short the option (sold the option). There are many times when we employ the position management skill and options are bought back and new options sold or our underlyings are sold. This adds additional legs to the […]
Podcast
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
- 94. Covered Call Writing Net Debit Limit Orders
- 93. WHEN CALL STRIKES MOVE DEEP ITM EARLY IN A CONTRACT
- 92. Selling Deep OTM Cash-Secured Puts to Create High-Probability Returns
- 91. Portfolio Overwriting Analyzed
- 90. Entering a Collar Trade
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