Implied volatility (IV) is directly related to the value of the premiums we receive when selling covered call and put options. The more volatile the underlying security, the greater the […]
Implied Volatility and Expected Price Movement of our Stocks During the Life of a Contract
Posted on October 26, 2019 by Alan Ellman in Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations
Probability Analysis when Using Covered Call Writing or Selling Cash-Secured Puts
Posted on April 8, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Whether we are selling covered calls or cash-secured puts we frequently look to our broker platforms for ways of enhancing our trading success. As these platforms become more sophisticated and competitive, […]
Comparing Implied Volatility and Historical Volatility During Earnings Season
Posted on March 26, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies, Technical Analysis
When selecting stocks and options for covered call writing and put-selling we factor in volatility, both implied and historical. Historical Volatility (HV) is the actual volatility of a security over a given time period. […]
A Review of Volatility and its Impact on Option-Selling
Posted on November 7, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we write covered calls or cash-secured puts, we are selling volatility. The time value component of a short-term option premium reflects the amount of time until expiration plus the […]
Using Volatility to Predict Future Stock Prices
Posted on October 24, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Volatility is a key consideration for both stock selection and option-selling decisions. Despite its relevance to our covered call writing and put-selling selections, volatility does have its limitations and we […]
How To Use Implied Volatility In Our Covered Call Writing Decisions
Posted on February 28, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Understanding the Greeks, or factors that impact the value of our covered call premiums, is essential to mastering options trading basics and becoming an elite covered call writer. One of […]
Implied Volatility: More Important Than Historical Volatility To Covered Call Writers And Put-Sellers
Posted on January 31, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Understanding the concept of implied volatility is essential for successful covered call writing and selling puts. First, implied volatility gives us a window into the “market’s” perception of future price […]
Vega: An Option Greek And How It Impacts Our Option Pemiums
Posted on April 26, 2014 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing generates monthly cash flow by selling short-term options. The main factor in determining the amount of this premium is the implied volatility (IV) of the underlying security. The […]
Volatility Skew- Understanding Option Premiums Over Different Time Frames and Strikes
Posted on October 20, 2012 by Alan Ellman in Option Trading Basics, Options Calculations
In covered call writing, our option premiums are influenced by the volatility of the underlying security. Using the Black Scholes option pricing model, we can calculate the volatility of the underlying […]
Implied Volatility and Our Covered Call Writing Premiums
Posted on July 14, 2012 by Alan Ellman in Option Trading Basics
What makes some stock option premiums worth so much more than others? Let’s say we have two stocks, A and B. Both are trading @ $25/share. We look to sell […]
Podcast
- BCI PODCAST 121: What is a SPAC (Special Purpose Acquisition Company)?
- 120. Using the Nasdaq-100 Volatility Index (VOLQ) in Covered Call Writing Decisions
- 119. Establishing Our Cost-Basis for Long-Term Holdings
- 118. Adjusting Our Portfolio Mix to Achieve Diversification and Cash Allocation
- 117. When a Covered Call Strike Moves $1000.00 In-The-Money
- 116. How to Execute a Covered Call Trade with a Buy/Write Combination Form
- 115. Establishing Our Cost Basis When Rolling-Out-And-Up On 2 Different Days
- 114. The Poor Man's Covered Call Selecting the Best LEAPS Strikes
- 113. How to Select the Best Strikes for Collar Trades
- 112. Using Covered call Options and Stock Dividends in Low Interest Rate Environments
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Beginners Corner Enhanced & Updated
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Beginners Corner Selling-Puts
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- Lesson 5:puts-selling-Calculating Returns
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