Feb 1, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Our study of option trading basics and stock option strategies involves an analysis of implied volatility. This is the market’s forecast of the underlying security’s volatility as implied by the option’s price in the market place. Frequently, the...
Jan 18, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
In our BCI methodology, our covered call writing strategy has several guidelines and one rule. The rule is to never sell a covered call option when there is an upcoming earnings report prior to expiration. Some may ask why not? With the added volatility are our...
Jan 5, 2013 | Option Trading Basics, Options Trade Execution, Stock Option Strategies
When studying the basics of option investing we learn that the option holder of an in-the-money strike has a certain amount of intrinsic value which appears to be profit that would never be bypassed. For example, if we (as covered call writers) sold a $50 call and the...
Dec 8, 2012 | Option Trading Basics, Stock Investing, Stock Option Strategies
For covered call writers the main stock option strategy is to purchase an equity specifically for the purpose of selling the corresponding call option. The investment time frame is one to two months as earnings reports will end the “run” of even the best performing...
Nov 17, 2012 | Option Trading Basics, Options Trade Execution
There are two ways to enter a covered call position. The first is called legging-in where the stock is purchased and then the option is sold. Two distinct trades are executed. The second is known as a buy-write order where the security purchase and option sale is...
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