Covered call writers know how important exit strategies are to our ultimate success. Position management skills must be activated when share price rises or falls dramatically and when dividends become an issue or when a strike is in-the-money as expiration of the contract nears. Using our 20%/10% guidelines assist us in defining when to close […]

Portfolio Management- Organized Lists To Improve Our Option Profits For Covered Call Writing
How to trade options: I am a big believer in setting yourself up for success. This is accomplished through education, motivation, commitment and organization. Investors reading this article and others are definitely seeking education, and are motivated and committed. However, without organization the process will become difficult and perhaps unmanageable. As we create a watch list […]

Covered Call Writing: Managing Stocks That Have Gapped Down
Every once in a while, when using our covered call writing strategy a stock will gap up or down. A gap is a break between prices on a chart that occurs when the price of a stock makes a sharp move up or down with no trading occurring in between. Gaps can be created by factors such as […]

Constructing Your Covered Call Portfolio During Earnings Season
From mid-January to mid-February many of our watch list stocks will be reporting earnings rendering these equities ineligible for covered call writing at least until after the report is announced. This does NOT mean that our money will stay on the sidelines for a month (unless market conditions dictate this action). Blue Collar Investors are great people […]

Setting Up a Covered Call Portfolio-Diversification and Cash Allocation
A key mission statement in our Blue Collar investment strategy for covered call writing is risk management. An integral component needed to accomplish this goal is diversification and cash allocation. We want to own at least five different stocks in five different industry segments with no single equity or industry representing more than 20% of our portfolio. […]

Constructing a Covered Call Portfolio Using Select Sector SPDRS
Select Sector SPDRs are unique exchange-traded funds that divide the S&P 500 into nine sector index funds. They have the diversity of a mutual fund, the focus of a sector fund, and the tradability of a stock. Together, the nine Select Sector SPDRs represent the S&P 500 as a whole. However, each Select Sector SPDR can also […]

Rolling Strategies On Or Near Expiration Friday
With one week remaining before the expiration of the November option contracts I thought I’d use this week’s blog article to review the process of the rolling exit strategies. I will use a real-life example taken from our Weekly Stock Screen and Watch List. The figures you will see are based on the options chain […]
Recent Comments