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

- 50. Exit strategies Must Be Timed Properly
- 49. Analyzing a Multi Leg Covered Call Rolling Down Series of Trades
- 48. Rolling Deep OTM Cash Secured Puts
- 47. Rolling Up in the Same Contract Month
- 46. Should Delta Be the Sole Criteria for Covered Call Writing Strike Selection
- 45. Implied Volatility and Expected price Movement During the Life of Option Contracts
- 44. Can We Use ITM Strikes to Create a No Risk Covered Call Strategy?
- 43. Converting a Covered Call Trade to a Collar Trade
- 42. Why Was My OTM Put Exercised?
- 41. Collar Trades When Call Strikes Move Deep In The Money

### Subscribe To Our Free Newsletter

### Categories

- Ask Alan (14)
- Covered Call Exit Strategies (158)
- Exchange-Traded Funds (44)
- Exit Strategies (141)
- Fundamental Analysis (32)
- Investment Basics (425)
- Just Alan (6)
- Option Trading Basics (436)
- Options Calculations (280)
- Options Trade Execution (101)
- paper trading (4)
- Podcasts (47)
- Put-selling (58)
- Stock Investing (106)
- Stock Option Strategies (401)
- Stock Trading & Taxes (18)
- Technical Analysis (40)
- Uncategorized (17)

### Recent Posts

- Establishing Our Cost-Basis for Long-Term Holdings
- BCI PODCAST 45 Implied Volatility and Expected price Movement During the Life of Option Contracts
- How to Select the Best Strike Prices for Collar Trades: Real-Life Example with Advanced Micro Devices, Inc. (NASDAQ: AMD)
- BCI PODCAST 44 Can We Use ITM Strikes to Create a No Risk Covered Call Strategy?

### Premium Membership

### Why Covered Call Options May Be Your Best Investing Strategy

### Nasdaq Interviews Alan Ellman

**© 2020 The Blue Collar Investor. All Rights Reserved.**

### Beginners Corner Enhanced & Updated

- Lesson 1: Beginner's Corner for Covered Call Writing: 2nd Edition
- Lesson 2: Beginner's Corner for Covered Call Writing- 2nd Edition: Option Basics
- Lesson 3: Beginner's Corner for Covered Call Writing- Stock Selection
- Lesson 4: Beginner's Corner for Covered Call Writing-2nd Edition
- Lesson 5: Beginner's Corner for Covered Call Writing
- Lesson 6: Beginner's Corner for Covered Call Writing
- Lesson 7: Beginner's Corner for Covered Call Writing: 2nd Edition
- Lesson 8: Beginner's Corner for Covered Call Writing
- Video 9: Premium Membership

### Beginners Corner Selling-Puts

- Lesson 1: What Is Puts Selling?
- Lesson 2: Puts-Selling Option Basics
- Lesson 3:puts-selling-technical analysis
- Lesson 4:puts-selling-Common Sense Considerations
- Lesson 5:puts-selling-Calculating Returns
- Lesson 6:puts-selling-Executing Put-Selling
- Lesson 7:puts-selling- Exit Strategies
- Lesson 8:puts-selling-Mastering Put-Selling

## Recent Comments