Nov 16, 2024 | Fundamental Analysis, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
click ↑ 4 Featured When writing covered calls in bear and volatile markets, we may choose to take a defensive posture and use in-the-money call strikes which offer additional downside protection in the form of intrinsic value. We can take this approach to an even...
Nov 28, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
The Poor Man’s Covered Call (PMCC), also known as a long call diagonal debit spread, is where deep in-the-money (ITM) LEAPS options are used in place of the long stock position. As with all strategies, the PMCC has its advantages and disadvantages but the main...
Oct 19, 2019 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Strike selection is the second required skill when writing covered call options or selling cash-secured puts. Over the years I have been asked to suggest a specific Delta for strike selection implying that this statistic would be the sole criterion to determine strike...
Sep 29, 2018 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Portfolio Overwriting is covered call writing using existing long-term buy-and-hold securities. It implies low cost-basis shares, dividend-bearing stocks and exchange-traded funds (ETFs). Since we don’t want our shares called away while generating additional...
Jul 28, 2018 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
For covered call writers and put-sellers, the option Greeks play a major role in our understanding of the risks and value of our option premiums. We know our option premiums consist of intrinsic value (for in-the-money strikes) + time value. Our initial time value...
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