When we sell an in-the-money covered call, we are taking a defensive posture and using the intrinsic value component of the premium to protect the time value initial profit. As an example, let’s look at New Oriental Education (NYSE: EDU) on April 7, 2017: EDU priced at $61.50 $60.00 (ITM) call priced at $3.55 Expiration […]
Implied Volatility: General Market Conditions That Make Option Values Move Up Or Down
Option trading basics teaches us that selling call and put options is actually selling time value. Time value consists mainly of time to expiration stats and the implied volatility (IV) of the underlying security. Since most of us are selling monthly options, the main distinguishing factor in our option prices is the implied volatility…we are […]
“Pinning the Strike”: A Covered Call Writing Consideration
When considering covered call exit strategies on or near expiration Friday we compare the market price of our stock to the strike price sold. If the share value is even one penny above the strike, the option will most likely be exercised and our shares sold. We may not want this to occur and we […]
Podcast
- 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
- 89. Am I Losing Money When I Buy Back My Deep ITM Covered Call Options?
- 88. Creating a Portfolio of Weekly Cash-Secured Puts
- 87. Bear Market Concerns and Our Option Selling Portfolios
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