beginners corner
Tag Archives: Ellman Calculator
covered call writing and the Ellman Calculator

Writing Covered Calls On Broad Market Exchange-Traded Funds

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 portfolio. ETFs offer the advantages of instant diversification, less volatility (in […]

17 Comments Continue Reading →
calculating covered call writing returns using the Ellman Calculator

Calculating 2-Month Returns When Rolling Out And Up

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 much more significant than a $1000 return on a $100,000 investment (1%). That’s why percentages forms […]

11 Comments Continue Reading →
covered call writing and option calculations

Ellman Calculator: Enhancements Made In The 2014 Version

Options calculations are an integral part of our BCI methodology both in guiding us in making the best investment decisions and also in determining our trading success. To assist in achieving these goals I developed the Ellman Calculator six years ago and with the benefit of your suggestions my team and I have been enhancing […]

13 Comments Continue Reading →
covered call writing and technical analysis

Combining Technical Analysis And Market Assessment To Determine Strike Selection

Mastering stock and strike price selection are key components in successful covered call writing. There is no one factor that will dictate our choices but rather a mosaic of bits of information which will lead us to the best selections. In this article, I will discuss two of those critical components: technical analysis of the […]

15 Comments Continue Reading →

Exit Strategy Calculations vs. Final Calculations

Mastering options calculations is an essential skill needed to attain the very highest covered call writing returns. Although the Ellman Calculator will do most of the heavy lifting for us, understanding the reasons behind these calculations and when and how to apply them, will make us all more skilled investors. Recently a BCI member sent […]

11 Comments Continue Reading →
covered call writing calulations

Option Premiums: How Intrinsic Value Protects Time Value

Meaningful option calculations are essential in determining if the premiums meet our goals. To this end, we must understand the mathematics of these calculations to become elite covered call writers. Now don’t worry…we don’t have to become Albert Einstein to be successful. But we do have to have a general understanding of the components of […]

8 Comments Continue Reading →
Covered call writing and strike price selection

Achieving The Highest Covered Call Writing Returns Using The Blackjack Analogy

Covered call writers and all investors using stock options strategies have one thing in common: we all want to achieve the highest possible returns within the framework of our own personal risk tolerance. The focus of this site and The Blue Collar Investor is to provide the education and to share ideas that will help […]

18 Comments Continue Reading →

Covered Call Writing: The Case For 1-Month Options

I sell predominantly 1-month options when selling covered calls. This decision was NOT based on anything I read or was told, but rather on experience and common sense. Most stocks with options have at least four expiration cycles affiliated with them at any point in time…the current month, the next month and two more months further […]

8 Comments Continue Reading →
Covered call writing profits

Setting Up Your Covered Call Portfolio Using The Ellman Calculator

Covered call writing involves options calculations…there’s no getting around it!  It’s been a while since we talked math. What’s with all the frowns? Mastering and understanding the calculations (The Ellman Calculator will do all the work) will enhance our bottom lines…more cash in our pockets. With that in mind, let’s set up a hypothetical portfolio of […]

9 Comments Continue Reading →
Calculating strike selection returns

Selecting The Best Strike Price

In last week’s article concerning option trading basics I highlighted the in-the-money strike in our covered call writing strategy. In this article I will expand our options calculations to all three types of strike prices. First, let’s review each of these categories: Out-Of-The-Money-Strike Prices: There is a reason why these are  popular strikes for many investors. […]

22 Comments Continue Reading →