Mar 14, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Trading & Taxes
Whether we sell covered calls or cash-secured puts strong consideration should be given to trading in sheltered accounts whenever possible. Most, if not all, of our trades will be short-term in nature (less than one year) and therefore will be taxed at the ordinary...
Feb 21, 2015 | Option Trading Basics, Options Calculations, Stock Option Strategies, Technical Analysis
When using covered call writing and put-selling strategies it is important to set goals for initial returns in order to select the most appropriate underlying security and option. My goal for initial returns is 2% – 4% per month and a bit higher in a bull market...
Aug 9, 2014 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
Understanding option calculations is an integral part of the BCI methodology. Using the Ellman Calculators (Basic and Elite versions) will facilitate the process but knowing the “how” and “why” of these numbers will make us all better...
Jul 18, 2014 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
The initial main step for covered call writers is to select the best underlying security. This choice will vary from investor to investor based on goals and risk tolerance. Some of our members prefer exchange-traded funds (ETFs), a strategy I use in my mother’s...
Jul 12, 2014 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
Options calculations will give us an accurate assessment of our covered call writing profits. It’s more meaningful to use percentages rather than dollar amounts when executing these calculations. For example, a $1000.00 profit on a $10,000 investment (10%) is...