When covered call writing is combined with protective puts the strategy is known as the collar strategy. The short call places a ceiling on gains and the long put represents a floor protecting losses. The two option positions should result in a net credit. Typically, out-of-the-money calls and puts are selected. Covered call writing and […]

## The Collar Strategy from a Delta Perspective

Posted on January 6, 2018 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies

## Beware of High Premium Returns

Posted on November 18, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Covered call writers and put-sellers must set goals regarding targeted premium returns before entering trades. These objectives are based on personal risk tolerance, market assessment and chart technicals. One of the most flagrant mistakes made by option sellers is to make trade decisions based on the highest premium returns. Covered call writing and put-selling are […]

## Determining the Delta of our Strikes Using the Airport Formula

Posted on August 12, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies

“What is the best Delta to use when selling covered call options?” I get this question frequently from the educated core of members from our BCI community. Delta is one of the five option Greeks which are mathematical means of quantifying the risk inherent in our option positions. Delta is one of, what I consider, the “big 3”, with […]

## Gamma: The Delta of Delta Impacting Exit Strategy Opportunities

Posted on May 28, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations

Option Greeks are mathematical means of measuring the risk of stock options. One of the least discussed of these factors is Gamma. In this article, we will explore the significance of this Greek and relate it to covered call writing. Gamma defined and explained- Second order price sensitivity Gamma is an estimate of how […]

## Delta Defined from Three Perspectives

Posted on April 23, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies

Delta, one of the major Greeks, correlates the relationship between stock price and option value. Option traders use the Greeks to evaluate the risk inherent in our positions and Delta is a critical tool used to measure that liability. As we study the option literature, many of us have come across three related, but different, definitions […]

## Greeks Spreadsheet Showing the Impact of Time to Expiration, Volatility and Stock Price Change on Option Value

Posted on April 9, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies

Covered call writing and selling cash-secured puts involve both buying and selling of call and put options. We are dealing with two types of options as well as utilizing both long and short positions of each. When we factor in the major Greeks, it is important to understand the relationship between time to expiration, stock […]

## Delta and Theta and their Impact on our Covered Call and Put-Selling Positions

Posted on March 12, 2016 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies

The Greeks play a major role in both covered call writing and selling cash-secured puts. Understanding these factors and tailoring our strategy based on this insight will allow us to elevate our returns to the highest possible levels. In today’s article, we will focus in on Delta and Theta and discuss when they are an […]

## Why Would Call Option Value Decline If Stock Price Rises? Evaluating Option Greeks

Posted on December 26, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies

Covered call writers and put-sellers know that option value is impacted by the change in stock price by the amount of its Delta. Delta, one of the option Greeks, is defined as the amount an option value will change for every $1.00 change in share value. If a call option priced at $2.00 with a […]

## Calculating the Greeks Using an Options Calculator

Posted on September 26, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations

The Greeks are a mathematical means of estimating the risk of stock options. Delta measures the change in the option price due to a change in the stock price, Gamma measures the change in the option delta due to a change in the stock price, Theta measures the change in the option price due to […]

## Delta And The Moneyness of Options

Posted on May 2, 2015 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies

Understanding and mastering the Greeks are key factors in becoming an elite covered call writer and put-seller. In this article, I will focus on delta, one of the important Greeks, as it relates to the moneyness of options (in-the-money, at-the-money or out-of-the-money). Let’s start with a review of a few definitions: Definitions Greeks: They are numbers […]

### Podcast

- 20. Rolling Down When There is a General Market Decline
- 19. Using the Ellman Calculator to Monitor "Hititng a Double" Trades
- 18. Market Assessment Analysis Based on Portfolio Composition
- Using Stock Dividends & Option Premium To Generate Cash-Flow
- 17. COMBINING Covered Call Writing and the Stock Repair Strategy
- 16. VIX Covered Call Writing Selling Stock Options on Market Volatility
- 15. Strike Selection When Selling Puts
- 14. Analyzing a Covered Call Trade Trade with a 5000% Return
- 13. Adding a Short Put To a Collar Trade
- 12. Mean Analyst Rating MAR

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