Setting up our covered call writing and put-selling portfolios requires common sense analysis once our watch lists have been established. Considerations include proper stock and industry diversification, appropriate cash allocation to each position and. strike selection that will maximize our returns and reflect personal risk-tolerance and overall market assessment. In this article, I will dissect […]
Selecting Deep In-The-Money Strikes: A Real-Life Example
Option selection is the second required skill when selling call and put options. On 9/26/2017, George shared with me a trade he executed with Biogen, Inc. (BIIB). An in-the-money strike was sold and share price immediately accelerated. George was inquiring about how deep in-the-money (ITM) the strike prices should be set. George’s initial trade […]
Seeking the Highest Option Premiums is a Losing Strategy
One of the common mistakes made by covered call writers and put-sellers is to make investment decisions based primarily on the highest premium returns. Certainly, we all want to generate the highest levels of success but only when factoring in the risk we will be incurring. This article will look at high premium returns from […]
Using Technical Indicators to Assist with Strike Selection
When selling covered call or put options, strike price selection is one of the three required skills. Here are the main factors we evaluate when determining which strike price to select: Overall market assessment Personal risk tolerance Return goals Technical price chart In this article, we will focus in on the technical parameters that will […]
Using Out-Of-The-Money Puts and In-The-Money Calls to Manage Bear Markets
Strike price selection should be a focus when selling call and put options. With the stock market bearish and volatile at the start of 2016, this article will highlight how such choices will offer significant protection while still allowing for compelling returns. The stock I selected to demonstrate the main points is Adobe Systems, Inc., […]
“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 […]
Achieving The Highest Covered Call Writing Returns Using The Blackjack Analogy
Covered call writers and all investors using stock options strategies have one thing in common: we all want to achieve the highest possible returns within the framework of our own personal risk tolerance. The focus of this site and The Blue Collar Investor is to provide the education and to share ideas that will help […]
Selecting A Specific Strike Price For Our Covered Call Positions
We must master strike price selection to maximize our covered call writing returns. In our BCI methodology, strike price selection is ultimately determined after our careful stock screening analysis and overall market assessment. By developing a watchlist of eligible candidates with elite fundamentals and strong price chart technicals along with passing our common sense screens […]
Selling Deep Out Of The Money Covered Call Options
Strike price selection is a critical concept needed to master covered call writing. Selling in-the-money strikes is the most conservative approach to this strategy and selling out-of-the-money strikes is the most bullish. We use the latter when the overall market is bullish and chart technicals are bullish and confirming. Once we have decided that a […]
Delta and Our Covered Call Writing Decisions
When studying option trading basics and the Greeks we learn about our exposure to risk. Those of us who study options are constantly reading and hearing that delta, one of the Greeks, is one of the most powerful influences over option value. Because of this, I thought it prudent we discuss this subject in greater detail. Definition: Delta […]
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Ask Alan #153 | Using Options to Mitigate Stock Price Losses
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Understanding the “Paid-Up” Risk When Rolling Out-And-Up: A Real-Life Example with FIVE
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“Hitting a Double” Using a Lower Strike Price
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Multi-Leg Option Trades: Understanding Calculations and Results + HOLIDAY DISCOUNT CODE
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Evaluating an Initial Covered Call Writing Portfolio
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The New Stock Market- Algorithmic and High Speed Trading
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Options That Expire Weekly and Conventional Expiration Cycles
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Why the 3% Guideline Applies to Puts but Not to Call Options
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Earnings Pre-Announcements Explained and Categorized
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Tax Implications of Writing Covered Calls against Long-Term Holdings
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Alan Ellman Patrick, The best product, after reviewing the
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Patrick Hello Alan I have reviewed the 8 videos below a
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joanna Not sure why, but my brain is on a milk carton tod
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Roni Jay, thanks for detailed response and recomenda
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