beginners corner
Tag Archives: gap up
technical analysis for covered call writing

Price Charts Tell a Story and Provide Guidance in Formulating Our Investment Strategies

Technical analysis is one of the critical tools available to us in selecting the best stocks for our option-selling strategies. Price charts are much more than a sequence of dots and lines…they tell a story about a company which, with proper research, ultimately leads to a series of rules and guidelines that will assist in […]

25 Comments Continue Reading →
covered call writing and earnings reports

Earnings Reports and Rolling Options

When we sell a covered call and share price rises dramatically, there is a tendency to roll up in order to capture additional future share appreciation. The most common reason for a gap-up in price is a favorable earnings report. In mid-May 2017 Tim wrote me about a series of trades he executed that involved […]

38 Comments Continue Reading →
covered call writing and earnings reports

Avoiding Earnings Reports: Two Common Sense Perspectives

Never sell a covered call option or a cash-secured put for a stock with an upcoming earnings report. This is one of the most important rules in the BCI methodology. As a matter of fact, most other principles I refer to as guidelines because there is some leeway or flexibility to them. For example, the […]

25 Comments Continue Reading →
using cash-secured puts to buy a stock at a discount

How To Use Puts To Buy A Stock That Has Gapped Up

Mastering both conservative option selling strategies, covered call writing and put-selling will allow us to maneuver our way through most market situations. This past Wednesday, May 27, 2015 several of the stocks on our BCI Premium Watch List gapped up. On last week’s blog commentary I addressed the situation with BRCM and AVGO and the […]

15 Comments Continue Reading →
Unusual options activity and covered call writing

Unusual Options Activity: Speculation or Cheating?

Covered call writers are average retail investors looking to generate monthly cash flow in small but consistent increments and then compounding those profits. In time, it could lead to financial independence. Other investors look to make a lot of money in a short time frame by undertaking much greater risk than we do. Still others […]

6 Comments Continue Reading →
Exit strategies for covered call writing

Covered Call Writing: Generating Additional Income When A Stock Price Gaps Up

Mastering option trading basics includes incorporating exit strategies into our portfolio trades. These opportunities present themselves both when a stock prices declines and accelerates. Recently, a premium member presented me with a hypothetical trade involving FSLR that I felt would be of interest to the entire BCI community. Let me premise my remarks by saying that […]

7 Comments Continue Reading →