The CEO Strategy is a streamlined version of covered call writing, where we use only 11 underlying securities, the Select Sector SPDRs. This article will utilize a real-life example of how we can craft a CEO Portfolio with $25,000.00 cash available. First, some definitions.

CEO Strategy

• Acronym for Combing Exchange-Traded Funds with Stock Options
• Pool of underlying securities is the 11 Select Sector SPDRs, exchange-traded funds
• Only 4 of our 14 available covered call writing exit strategies are considered

Exchange-traded funds (ETFs)

Baskets of stocks that track an index, a commodity, an industry or a basket of assets like an index fund, but trade like a stock. They offer instant diversification.

What are the Select Sector SPDRs?

Unique ETFs that divide the S&P 500 into 11 index funds which focus on specific industry groups or sectors. All have associated options.

How do we establish a CEO Portfolio with $25,000.00 available?

Our goal is to achieve maximum diversification with the cash available, while still utilizing the best-performing Select Sector SPDRs and assuring a reserve cash balance to execute exit strategy opportunities, if they arise. With $25k available, a reasonable starting point would be to locate 3 securities priced in the $80s or less.

The 1-3-2024 BCI Premium Member ETF Report

Examining the CEO section (middle) of this report, there are 3 ETFs priced in the $80s or less, XLB, XLF and XLRE. Using the CEO Portfolio Setup Spreadsheet, we enter $25k and 3 securities on the top and the price-per-share on the lower half of the spreadsheet (shown below). In this case, the data resulted in an acceptable setup, with adequate cash reserve for potential exit strategy executions ($1,158.00).

The CEO Portfolio Setup Spreadsheet based on the 1-3-2024 BCI ETF Report

We are now diversified into approximately 27% of the S&P 500 (3/11) and have a cash reserve of $1158.oo for exit strategy executions, if needed.

Discussion

A CEO Portfolio with $25k cash available can be constructed using diversification and cash reserves as key components of our portfolio construction.

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The Complete Encyclopedia for Covered Call Writing- Classic Edition (Amazon.com best-seller)

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Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:

RE: Exit Strategies for Covered Call Writing and Selling Cash-Secured Puts:

Reviewed in the United States on December 6, 2022

Dr. Ellman’s Exit Strategies book continues to hold an important spot on my investor resources bookshelf!
After many years following the BCI formula, I continue to research trading ideas and advice within its pages and – all with no BS, no hyping or sales gimmicks!
I’ve purchased copies for both my sons as they begin their own journey into becoming master of their own investing and “Taking Control of Their Financial Futures” as Dr. Ellman often reminds me!
I continue to thank him for sharing this in-depth information and strategies with anyone who wants to learn, without the traditional sales hype we see from “Wall Street Experts”!

James W.

Upcoming events

1. Mad Hedge Stock Investor Summit (online event)

June 4, 2024

11 AM ET – 12 PM ET

Covered Call Writing: Multiple Applications Based on Current

Market Conditions

Real-life examples with Invesco QQQ Trust (Nasdaq: QQQ)

Covered call writing is a low-risk option-selling strategy geared to generating cash flow with capital preservation a key requirement. This presentation will demonstrate how the strategy can be crafted to benefit in all market environments. Market situations highlighted are:

• Normal to bull markets
• Bear and volatile markets
• Low interest-rate environments

A popular large-cap technology exchange-traded fund, Invesco QQQ Trust, will be used to establish rules and guidelines to benefit in these market circumstances.

Registration link to follow.

2. BCI-Only Webinar (Zoom)

July 18, 2024

Exit Strategy Choices After Exercise of Cash-Secured Puts

When we sell cash-secured puts, we are undertaking the contractual obligation to buy shares at the strike price by the expiration date. Typically, we only sell puts on elite-performers that we would be agreeable to own in our portfolio.

This presentation will analyze 4 potential exit strategy opportunities to consider should the put option be exercised. Information on the following strategies will be highlighted:

• Selling the stock
• Holding the stock in our long-term buy-and-hold portfolio
• Write a covered call (PCP or “wheel” strategy)
• Implement the Stock Repair Strategy

In addition to these strategies, the following topics will also be included in the webinar:

• Option basics for selling cash-secured puts
• Option basics for covered call writing
• Real-life examples
• Calculations using the BCI Trade Management Calculator (TMC)
• Event super discount offer

There will be information offered to all levels of options trades, from beginners to advanced.

Registration link to follow.

3. Investment Masters Symposium (live, in person event)

August 1, 2024

Presentation #1: 8:45 AM – 10:45 AM

Paris Hotel, Las Vegas

Covered Call Writing & Selling Cash-Secured Puts to Generate Consistent Cash Flow

Basic & advanced principles for trading low-risk stock options with capital preservation in mind

This presentation will detail stock selection, option selection and position management, the 3 required skills to become elite covered call writers and put sellers. It will also include ultra-conservative approaches to these strategies using Delta and implied volatility to create statistically beneficial trades. Rules and guidelines will be discussed to take the emotions out of our trades resulting in high-probability positive outcomes.

Detailed analysis will be provided regarding how to craft our trades to the current market environment, personal risk-tolerance and strategy return goals.

A multi-tiered option-selling strategy which combines both covered call writing and selling cash-secured puts will also be examined. It is known as the PCP (put-call-put) or “wheel strategy.”

Attendees will be introduced to a one-of-a-kind trade management tool, the Trade Management Calculator, which is used to enter, manage and generate final realized and unrealized trade results.

The course is structured to benefit both beginner and advanced option traders, using real-life examples to enhance the learning process.

Presentation #2: All Stars of Option Trading Event

Registration details to follow.

4. Stock Traders Expo- live event in Orlando Florida

October 17 -20

Details to follow.