Jan 6, 2018 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When covered call writing is combined with protective puts the strategy is known as the collar strategy. The short call places a ceiling on gains and the long put represents a floor protecting losses. The two option positions should result in a net credit. Typically,...
Sep 24, 2016 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Since we are selling call and put options we know there are traders or market makers who are buying them. In this article we will explore why only about 10% of all call options are actually exercised by the option holders even when the holders want to own the...
Sep 17, 2016 | Fundamental Analysis, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Covered call writing and selling cash-secured puts are low-risk option-selling strategies used to generate monthly cash flow. Low-risk does not mean no risk so how can we measure the degree of risk we are undertaking? Let’s first all agree that any strategy that...
Apr 23, 2016 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Delta, one of the major Greeks, correlates the relationship between stock price and option value. Option traders use the Greeks to evaluate the risk inherent in our positions and Delta is a critical tool used to measure that liability. As we study the option...
Dec 12, 2015 | Investment Basics, Option Trading Basics, Stock Option Strategies
What is the impact on the overall market on our covered call writing and put-selling positions? We know that market movement plays a major role in our stock and options selections as well as our position management choices. In today’s article we will discuss a...
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