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Tag Archives: stock split
Delta and covered call writing

Hitting a Double with News-Related Market Overreactions

Stock selection, option selection and position management are the 3 required skills for covered call writing and put-selling. One of our go-to exit strategies is “hitting a double” where we buy back the original option sold if share price declines and then re-sell that same option as share price recovers. Stock prices whipsaw and that […]

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contract adjustments following reverse stock splits

Reverse Splits and Unreliable Options Chains

Stock splits are corporate events where the number of shares in circulation changes as well as the price -per-share. If we own 100 shares at $50.00 per share pre-split and the stock splits 2-for-1, then we will own 200 shares at $25.00 post-split. The value of our position ($5000.00) does not change.   What is […]

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covered call writing exit strategies and contract adjustments

Rolling Down And Stock Splits: A Real Life Example

Covered call writing positions can be altered by exit strategies or contract adjustments. Contract adjustments are alterations that are typically made to option contracts when the underlying stock undergoes a stock split, pays a special cash and/or stock dividend or distribution, or is involved in a merger, acquisition or corporate reorganization. Sometimes they are impacted by […]

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Coveredc call writing and contract adjustments

Covered Call Writing And Contract Adjustments + Our Premium Report Is Getting Even Better

Options Trading Basics includes the fact that one options contract incorporates 100 shares of the underlying security. The right or the obligation is for the purchase or sale of 100 shares of stock or exchange-traded funds. This is the rule but there are exceptions to this rule. From time to time a certain event will […]

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