Comments on: VIX Volatility Options: A Place In Our Covered Call Writing Portfolio? https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/ Learn how to invest by selling stock options. Tue, 22 Mar 2016 16:00:55 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-36943 Tue, 22 Mar 2016 16:00:55 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-36943 In reply to Guyina Garant.

Guyina,

Type in “VIX” into the Google search tool at the top of our web pages and you will access several free articles I wrote on this topic.

Thanks for your interest in the BCI methodology.

Alan

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By: Guyina Garant https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-36776 Tue, 22 Mar 2016 03:05:34 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-36776 Hello Mr. Alan,

I’m trying to determine the market tone and I am not sure what to do.

What method do you use Alan?

Investors.com tells me on March 21, 2016 “Market Trend” Confirmed Uptrend.

How do I determine (and/or) confirm for myself as a retail investor?

In your glossary, I read this:

Market Tone
The feeling of a market (general psychology) as demonstrated by the price activity of stocks. We use the VIX and S&P 500 chart patterns to help assess this sentiment.

Could you kindly point me to an article on your web site that will help me learn to use the VIX and S&P 500 chart patterns, or is there more to it for me?

Thank you sir.

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By: Alan Ellman https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-24132 Fri, 04 Sep 2015 12:31:06 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-24132 In reply to Arch.

Arch,

To get short interest:

http://finance.yahoo.com/

Quote-enter ticker-Go

Company (left side)

Key statistics (left side)

Short interest stats on right side of page

Alan

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By: Arch https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-24131 Fri, 04 Sep 2015 12:29:48 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-24131 Alan,

In your recent explanation of Short Interest for options . Can you please let me know where I can find that metric?

Thanks.

Arch

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By: Alan Ellman https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-24130 Fri, 04 Sep 2015 12:10:31 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-24130 In reply to Kenneth.

Hi Kenneth,

Whenever I make a mistake, I view it as an opportunity to learn from it which will make me money in the long run. One of the most important BCI rules is never to sell an option prior to an earnings report. In this case, you sold the August call with an earnings report due out 7/30/2015. Have a look at the chart below and the price decline after a disappointing ER.

Lesson learned! (happened to me many times before I figured this out many years ago).

CLICK ON IMAGE TO ENLARGE & USE THE BACK ARROW TO RETURN TO BLOG.

Alan

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By: Kenneth https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-24128 Fri, 04 Sep 2015 06:34:27 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-24128 On 7/17/15 I bought 100 shares of OUTR for $84.00 and sold an $85.00 call option for $3.70. I bought the option back for .10 during the month. My net cost was $80.40.
On expiration day OUTR was worth $61.39 for a loss of $19.00 or 24%.

Was there something that I could have done to stop the bleeding?

Kenneth

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By: Alan Ellman https://www.thebluecollarinvestor.com/vix-volatility-options-a-place-in-our-covered-call-writing-portfolio/#comment-24113 Thu, 03 Sep 2015 10:53:12 +0000 http://www.thebluecollarinvestor.com/?p=11424#comment-24113 In reply to Ken.

Hi Ken,

Good question. Any of the above will suffice. What we don’t want is for the underlying stock to decline significantly. That’s why we have an arsenal of exit strategies available if the trade turns against us.

As long as the stock value does not decline more than the premium generated from the option sale, we make money. Best case scenario is when we sell an out-of-the-money strike and the share price moves up to (or even beyond) the strike price.

Alan

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