Tag Archives: in-the-money

## Rolling Option Considerations: A Real-Life Example with BEAT

Exit Strategies for covered call writing is the third required skill for successful implementation of this strategy (stock selection and option selection are the first two). This is also known as position management. One of the most common situations we face each month is when the strike price we initially sold is expiring in-the-money (stock […]

## Rolling Out-and-Up After Understanding the Math

Elite covered call writers understand the importance of position management in maximizing returns. As a result, I receive a significant number of inquiries regarding exit strategy execution. This article will highlight one such question I received from John which has two components to it. The main item relates to rolling-out-and-up, a frequently-used exit strategy in […]

## “Moneyness” Of Call And Put Options: Understanding Strike Prices

Strike price selection is such a key part of options trading basics and options calculations. There are 3 types of strike prices for both put and call options: in-the-money, at-the-money (and the closely related near-the-money) and out-of-the-money. Moneyness tells option holders whether exercising will lead to a profit.  Moneyness looks at the value of an option […]

## Selecting The Best Strike Price

In last week’s article concerning option trading basics I highlighted the in-the-money strike in our covered call writing strategy. In this article I will expand our options calculations to all three types of strike prices. First, let’s review each of these categories: Out-Of-The-Money-Strike Prices: There is a reason why these are  popular strikes for many investors. […]

## THE FACTORS THAT DETERMINE THE VALUE OF YOUR OPTION PREMIUM plus Our Readers Pick their Favorite Stocks

So you sold an options contract for \$380 and generated a 3.5% 1-month return. Did you ever wonder how the market determined the value of that contract to be \$380? The simple equation that most of us know and understand is the following:  Option premium = Intrinsic Value + Time Value To review, let me […]