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Tag Archives: early exercise
covered call writing and dividends

Early Exercise Due to Dividend Capture: Theoretical and Practical Applications

When we write a covered call option we are obligated to sell our shares at any time from the option sale to contract expiration if the option buyer decides to […]

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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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early exercise of stocks options

Reasons for Early Exercise

Our covered call writing and put-selling options can be exercised at any time from the moment we sell these options until 4 PM ET on expiration Friday. This is the […]

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Over-Trading Our Option Positions: Good for Brokers, Not Good For Us

Exit strategies for covered call writing are essential for achieving the highest levels of success. In the BCI methodology, we have a series of guidelines that assist us in determining which position […]

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Covered call writing option basics

Option Prices: The Role Of Interest Rates And Dividends

Mastering options trading basics includes understanding the factors that impact our option premiums. The original Black Scholes pricing model was designed to evaluate European Style options which can only be […]

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In-the-money strikes and early exercise

When And Why Will My In-The-Money Strike Be Exercised?

Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why […]

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Using LEAPS to increase dividend yield

Using LEAPS Covered Calls to Increase Dividend Yield

Innovative covered call writers can develop ideas of implementing a strategy in unconventional ways. For example, we can invest in a money market or CD and perhaps not even beat the […]

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