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Tag Archives: covered call writing

When is it Appropriate to Use Covered Call Writing? A New Perspective

Covered call writing is applicable only in neutral to slightly bullish market environments”. We’ve heard this proclamation time and time again and so it has become accepted as fact to a majority of option-sellers. In this article, we will examine the reasons for the allegation and investigate a completely new viewpoint as to when covered […]

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selling options in bear markets

Defensive Call and Put Positions in Bear and Volatile Markets

Strike price selection can be tailored to our covered call writing and put-selling trades based on overall market assessment. In bear and volatile market conditions we favor in-the-money calls and deeper out-of-the-money puts (lower than current market value). In this article, we will evaluate defensive trades for Smith & Wesson Hldg (SWHC) as of 1/11/2016, […]

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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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How Bankruptcy Impacts Call and Put Options

We sell a covered call or cash-secured put and then the underlying company files for bankruptcy. What happens next? How are our positions effected?  Let me premise my remarks by saying how unlikely this scenario is for investors who follow the rigorous screening process of the BCI methodology. But there is a difference between unlikely and impossible […]

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covered call writing during earnings season

How to Use Weeklys and the Premium Stock Reports for Covered Call Writing During Earnings Season

One of the three required skills for covered call writing and put-selling is the selection of the underlying security. Along with this we also must avoid quarterly earnings reports. Since most corporations report earnings in similar time frames (known as earnings season) the number of eligible candidates is dramatically reduced during these time frames. The […]

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selling cash-secured puts

Can We Use Deep-In-The-Money Puts to Buy a Stock at a Discount?

One of the practical applications of selling cash-secured puts is to buy shares “at a discount” In my books and DVDs I use out-of-the-money puts in lieu of setting limit orders in order to accomplish this goal. Some of our members have inquired about using deep in-the-money puts (strike well above current market value) instead […]

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percentage of options that expire worthless

Myths and Misconceptions about Covered Call Writing

There are certain fallacies and deceptions associated with covered call writing as there are with all investment strategies. I am the first to say that there is no one strategy right for every single investor. We must master the pros and cons of each strategy to determine if it is right for our families. This […]

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Percentage Of Options Expiring Worthless: Debunking A Myth

“Selling covered call options and cash-secured puts is a smarter strategy than buying options because 90% of options expire worthless“. We’ve all heard this argument but never from me because it is simply not accurate. The reason so many venues present this statement as truth is because only 10% of option contracts are exercised. That is true. […]

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selling cash-secured puts in bear markets

How to Generate 10% Per Year in Bear Markets by Selling Stock Options

Covered call writing and put-selling generate monthly cash flow with the inherent risk of share depreciation. One of the major advantages of these conservative strategies is that they can be tailored to all market environments. In today’s article I will address one way to “stay in the game” even when market conditions are working against […]

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stocks for covered call writing and selling puts

Premium Stock Reports: Final Selections for Our Option-Selling Portfolios

The Blue Collar Premium Stock reports list eligible candidates for both covered call writing and selling cash secured puts. These files historically contain between forty to sixty securities and our members have developed many innovative ways to make final decisions as to which securities will be included in the current month’s portfolio. In this article, I […]

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