Mar 22, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Meaningful option calculations are essential in determining if the premiums meet our goals. To this end, we must understand the mathematics of these calculations to become elite covered call writers. Now don’t worry…we don’t have to become Albert...
Jul 6, 2013 | Investment Basics, Option Trading Basics, Options Calculations
Maximizing covered call writing profits requires us to master strike price selection. Very few covered call writers outside the BCI community use in-the-money strikes and, as a result, do not achieve the results that we do. Recently, a few BCI members sent me emails...
Jun 1, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Mastering covered call writing requires us to learn from our mistakes and not repeating them. We can then utilize a series of guidelines and rules that will guide us to the highest possible returns with the least amount of risk. Maximizing profits with capital...
Apr 6, 2013 | Option Trading Basics, Options Calculations, Stock Option Strategies
When studying option trading basics we learn the equation for option premium value is: Premium = time value + intrinsic value If the strike price is at- or out-of-the-money the premium is all time value. Another basic principle is that time value decreases as we...
Aug 11, 2012 | 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...