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Tag Archives: dividend

Special Cash Dividends and Equity Distributions: Understanding Contract Adjustments

Contract adjustments to the terms of our covered call writing and put-selling options are due to corporate actions like mergers and acquisitions, special dividends and stock splits. This article will […]

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stock dividends

Converting Non-Dividend Stocks Into Dividend Stocks

Generating a consistent cash flow from stock dividends is an appealing benefit from owning shares for many investors. Stock ownership, in these scenarios, can create two income streams, one from […]

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covered call writing with blue chip stocks

Dow 30 Stocks and Covered Call Writing: Implementing the Premium Blue Chip Report

The risk inherent in covered call writing and put-selling is related to price decline in the underlying security. Investors with low-risk tolerance may turn to blue chip stocks which have […]

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dividend capture and covered call writing

Combining Dividend Capture with Covered Call Writing: Pros and Cons

Why not use covered call writing with only dividend-bearing stocks to generate three income streams; option premium, share appreciation to the (out-of-the-money) call  strike plus the dividend itself? This article […]

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exit strategies for covered call writing

Rolling Down with CALM: Turning Losses into Gains

Exit strategies for both covered call writing and selling cash-secured puts is one of the three required skills for maximizing investment returns. Whether we are mitigating losses, turning losses into […]

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ex-dividend dates and option-selling

Ex-Dividend Dates: Rules for Standard and Special Dividends

Dividends impact option premiums. When a dividend is distributed the cash holdings of a corporation is decreased and therefore the company and its stock are worth less. The eligibility to […]

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Why do Call Buyers Exercise Early Prior to the Ex-Dividend Date?

Covered call writers know that early exercise is extremely rare. Call buyers are generally better off selling the option rather than exercising early. In this article we will evaluate why […]

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covered call writing exit strategies and contract adjustments

Rolling Down And Stock Splits: A Real Life Example

Covered call writing positions can be altered by exit strategies or contract adjustments. Contract adjustments are alterations that are typically made to option contracts when the underlying stock undergoes a […]

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covered call writing and early exercise

Early Exercise: I Don’t Want To Sell My AAPL Shares

Covered call writing obligates us to sell our shares to the option buyer at any time up to 4PM ET on expiration Friday should the buyer choose to exercise those options. […]

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How Quarterly Dividends Impact Our Covered Call Option Premiums

When studying option trading basics we learn the equation for option premium value is: Premium = time value + intrinsic value If the strike price is at- or out-of-the-money the […]

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