Meaningful option calculations are essential in determining if the premiums meet our covered call writing goals. To this end, we must understand the mathematics of these calculations to become elite option-sellers. Now don’t worry…we don’t have to become Albert Einstein to be successful. But we do have to have a general understanding of the components […]

In-The-Money Covered Calls: Intrinsic Value Protects Time Value: A Real-Life Example with TEAM + New Tool Coming Soon
Posted on June 29, 2019 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies

In-The-Money Call Strikes: Intrinsic Value Protects Time Value
Posted on May 19, 2018 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Strike price selection is one of the 3 required skills for covered call writing and put-selling. When we sell in-the-money call options we are protecting our positions to the downside while still generating the time value initial profits we have established in our strategy goals. In return, we are relinquishing any opportunity to generate additional […]

Why Would a Call Buyer Exercise, Rather than Sell, an In-The-Money Call Option?
Posted on September 9, 2017 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations
When we write a covered call, there is a trader or market-maker buying that call on the other side of the trade. We know that as expiration approaches, the time value of options tends to approach zero (Theta effect). With that in mind I received an email from Marcos in early May 2017 astutely asking […]

When is it Appropriate to Use Covered Call Writing? A New Perspective
Posted on May 7, 2016 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing is applicable only in neutral to slightly bullish market environments”. We’ve heard this proclamation time and time again and so it has become accepted as fact to a majority of option-sellers. In this article, we will examine the reasons for the allegation and investigate a completely new viewpoint as to when covered […]

Covered Call Writing When There Is Overall Market Concern
Posted on May 17, 2014 by Alan Ellman in Exchange-Traded Funds, Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing is a stock option strategy with primary goals of income generation and capital preservation. Most of us are conservative investors who use the power of education to master an investment strategy better than most everyone else using the same strategy. That is what the Blue Collar Investor is all about. In the […]

When And Why Will My In-The-Money Strike Be Exercised?
Posted on September 7, 2013 by Alan Ellman in Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why exercise will take place is critical to the implementation of appropriate exit strategies and therefore maximizing our option and stock profits. Let’s first look at […]

In-The-Money Strikes and Covered Call Writing
Posted on August 11, 2012 by Alan Ellman in Option Trading Basics, Options Calculations
Option trading basics incorporates fundamental, technical and common sense decisions. One of these, as it relates to covered call writing, is selecting a strike price for the short options position. In bearish and volatile markets I tend to favor the in-the-money strike. Before I address this matter, let’s review the pros and cons of each […]
Podcast
- 104. Special 1 Time Dividends and Contract Adjustments
- 103. The Collar Strategy Using Long-Term Put Expirations
- 102. Analyzing Market Assessment Based on Portfolio Setup
- 101. Covered Call Writing: "Hitting a Double" on the Last day of a Contract
- 100. Analyzing LEAPS for The Poor Man's Covered call Strategy (PMCC)
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
Subscribe To Our Free Newsletter
Categories
- Ask Alan (14)
- Covered Call Exit Strategies (215)
- Exchange-Traded Funds (61)
- Exit Strategies (209)
- Fundamental Analysis (44)
- Investment Basics (538)
- Just Alan (6)
- Option Trading Basics (552)
- Options Calculations (376)
- Options Trade Execution (198)
- paper trading (4)
- Podcasts (106)
- Put-selling (84)
- Stock Investing (114)
- Stock Option Strategies (505)
- Stock Trading & Taxes (19)
- Technical Analysis (47)
- Uncategorized (21)
Recent Posts
- BCI PODCAST 105: The Poor Man’s Covered Call: Rolling Options
- How to Adjust a Poor Man’s Covered Call (PMCC) Trade to Align with the BCI Trade Initialization Formula
- Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)
- BCI PODCAST 104: Special 1 Time Dividends and Contract Adjustments
Premium Membership
How Alan Got Started with Stock Options
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