Nov 11, 2017 | Covered Call Exit Strategies, Exit Strategies, Fundamental Analysis, Investment Basics, Option Trading Basics, Options Calculations, paper trading, Stock Option Strategies
A critical BCI rule for covered call writing is never to sell an option if there is an upcoming earnings report prior to contract expiration. Earnings reports are risky events we want to avoid. From time-to-time a company will pre-announce earnings especially if there...
Oct 28, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Portfolio overwriting is a covered call writing-like strategy where we sell call options against long-term buy-and-hold securities. Generally, these are low-cost basis stocks that are dividend-bearing and trading in non-sheltered accounts. We want to leverage these...
Oct 21, 2017 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Every investment strategy, including covered call writing and selling cash-secured puts, has advantages and disadvantages. When we decide to implement a plan, it is with the understanding that we accept and embrace these pros and cons. It is not productive to look...
Oct 14, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies, Stock Trading & Taxes
Covered call writing can be crafted to meet a multitude of trading styles, goals and personal risk tolerances. In this article, I will highlight yet another situation where we may utilize this great strategy. In this common hypothetical, we are preparing to sell a...
Jul 8, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies, Stock Trading & Taxes
Covered call writing is a short-term strategy where we sell Weekly or Monthly options to generate cash flow. It is best to use this strategy in sheltered accounts to defer or eliminate tax consequences but that is not always possible. Generally, the income from...