Aug 19, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell an in-the-money covered call, we are taking a defensive posture and using the intrinsic value component of the premium to protect the time value initial profit. As an example, let’s look at New Oriental Education (NYSE: EDU) on April 7, 2017: EDU...
Aug 12, 2017 | Investment Basics, Option Trading Basics, Stock Option Strategies
“What is the best Delta to use when selling covered call options?” I get this question frequently from the educated core of members from our BCI community. Delta is one of the five option Greeks which are mathematical means of quantifying the risk...
Apr 22, 2017 | Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writers must factor in dividends into our investment strategies. More specifically, ex-dividend dates for these are the dates shareholders must own the shares to benefit from the dividend distribution. Call buyers must exercise the option prior to the...
Dec 17, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
After executing our covered call writing trades, we immediately prepare for position management opportunities…exit strategies. One of these strategies in our arsenal is the Mid Contract Unwind exit strategy. This is used when share value appreciates dramatically...
Dec 3, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Put-selling, Stock Investing, Stock Option Strategies
After entering our covered call writing or put-selling positions, we immediately prepare for possible exit strategy opportunities. All exit strategies begin by buying back the option, call or put. These position management techniques are used to mitigate losses, turn...
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