Nov 8, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Option trading basics teaches us that selling call and put options is actually selling time value. Time value consists mainly of time to expiration stats and the implied volatility (IV) of the underlying security. Since most of us are selling monthly options, the main...
Nov 1, 2014 | Covered Call Exit Strategies, Exit Strategies, Stock Option Strategies
Exit strategies or position management is one of the three major components of this strategy we must master to become elite covered call writers. The other two are stock (or ETF) and option selection. In my books and DVDs I mostly focus on scenarios that can result in...
Sep 6, 2014 | Option Trading Basics, Options Calculations, Stock Option Strategies
Mastering the concepts of the time value of our option premiums and how theta impacts our option profits will help elevate our returns to the highest possible levels. Let’s first define these terms: Definitions Time value: The portion of the option premium that...
Aug 30, 2014 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing is a low-risk strategy that allows us to generate monthly cash flow by selling stock options. Since we are obligated to sell our shares to the option buyer (holder), one of the understood possibilities is that we will “lose” our shares...
May 24, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing is a strategy we use to generate consistent monthly cash flow, re-invest profits and ultimately to become financially independent. We strive to beat the market by using sound fundamental, technical and common sense principles. But why are we...
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