When we sell in-the-money call options, we are generating initial time-value profit that meets our stated goals plus creating downside protective of that time-value profit in the form of intrinsic -value. The disadvantage of these options is that we do not benefit from share appreciation because of our contract obligation to sell at the lower […]

Managing In-The-Money Strikes When Share Price Moves Higher
Posted on June 20, 2020 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Temporary Self-Loans for the Mid-Contract Unwind Exit Strategy
Posted on June 24, 2017 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
The mid-contract unwind (MCU) exit strategy is a position management maneuver we use to generate a second income stream in the same month with the same cash investment. The opportunity arises when share price moves significantly higher than the short call strike in the first half of a contract. This article will highlight a real-life […]

Rolling Up in the Same Contract Month: Comparing Before and After Scenarios
Posted on March 5, 2016 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Rolling up is a useful exit strategy for both covered call writing and put-selling. However, in my humble opinion, it rarely benefits us to roll up in the same contract month. The main reason for this conclusion is that we are dealing with a stock that has substantially appreciated in value in a relatively short […]
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- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
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