Jan 31, 2015 | 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 movement. It will also allow us to calculate...
Jan 17, 2015 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Stock Option Strategies
For the strategies of covered call writing and selling cash-secured puts, we are selling the right, but not the obligation, to buy or sell 100 shares of the underlying security. That security can be a stock or and exchange-traded fund (ETF). In this article, I will...
Nov 22, 2014 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
When protective puts are integrated into our covered call writing strategy it is known as the collar strategy. The covered call aspect of the trade generates cash flow and the protective put leg serves as an insurance policy against catastrophic share...
Nov 8, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
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...
May 24, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing is a strategy we use to generate consistent monthly cash flow, re-invest profits and ultimately to become financially independent. We strive to beat the market by using sound fundamental, technical and common sense principles. But why are we...