Portfolio Overwriting is covered call writing using existing long-term buy-and-hold securities. It implies low cost-basis shares, dividend-bearing stocks and exchange-traded funds (ETFs). Since we don’t want our shares called away while generating additional option premium, cash flow decisions must be made on the best strike prices to select for our short calls. What is the […]
Managing Great Stocks After Disappointing Earnings Reports
Never sell a covered call option or cash-secured put if there is an earnings report due out prior to contract expiration. This is one of the golden rules of the BCI methodology. We know that a report that disappoints generally did not meet market consensus regarding sales, earnings or both. However, the report still may have reflected great […]
Deep In-The-Money Strikes: A Can’t Lose Strategy?
Covered call writing is a strategy we use to generate consistent monthly cash flow, re-invest profits and ultimately to become financially independent. We strive to beat the market by using sound fundamental, technical and common sense principles. But why are we getting paid more than treasuries, CDs or money market accounts? The answer is that […]
Calculating Protective Puts: The Collar Strategy
Covered call exit strategies plays a major role in mitigating losses in our BCI methodology. In most cases, we can keep losses to a minimum, turn losses into gains and enhance profits as well. Some covered call writers want the security of protecting against a catastrophic gap-down which can occur rarely. This can be accomplished […]
Rolling Out And Up To Capture Share Appreciation: A Good Idea?
Covered call writing has some drawbacks as do all investment strategies. Profit limitation by the strike price is one such disadvantage. How do we manage a situation where the price of the stock moves well above the strike sold? Some covered call writers will roll out and up (to a higher strike price and a […]
Podcast
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
- 94. Covered Call Writing Net Debit Limit Orders
- 93. WHEN CALL STRIKES MOVE DEEP ITM EARLY IN A CONTRACT
- 92. Selling Deep OTM Cash-Secured Puts to Create High-Probability Returns
- 91. Portfolio Overwriting Analyzed
- 90. Entering a Collar Trade
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