Covered call writing has played a major role in allowing me to do the things I want to do when I want to do them. I have been able to devote time to family, friends and my extended family, the BCI community, which I wouldn’t have had the opportunity if not for self-investing with stock options. It has allowed me to become CEO of my own money and, more importantly, of my own life.
To show off a bit, and hit a home run for the Blue Collar Investor in us all, here’s an album of photos from my recent, 2-week European cruise with adorable Linda; my wife, my friend, my love. Covered call writing made this trip, and so many of life’s treasures possible. This is what I want for you. Come join me!
European Cruise Photos
This week’s 8-page report of top-performing ETFs and analysis of ALL Select Sector Components has been uploaded to your premium site. The report also lists Top-performing ETFs with Weekly options as well as the implied volatility of all eligible candidates.
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Connect with a fellow Australian:
One of our members, Ryan Miranda, would like to connect with fellow countrymen to discuss BCI methodology and trades. His contact information:
Sharing ideas can only help.
Alan and the BCI team
As I write TradeMONSTER is not yet open for business so I am using yesterday’s figures in this email. (Oct 30th ’14).
I am in a trade selected from your Premium Report and looking at exit strategies. The details are as below:
10/23/14 – Sold 1 AMBA Nov14 41 call (AMBAK2214C041000) @ $2.50
10/23/14 – Bought 100 AMBA @ $41.11
The share price closed yesterday at $41.80 and the option chain shows a Mark of $2.63 for the premium. The Option expires in 22 days time (from yesterday) which is Friday 22 November as shown in the symbol.
Although the price has moved up and down since the 23rd is is still maintaining an upward trend and the technicals still look strong but I wondered if I should be trying to work the investment harder so looked at a week 1and 2 Pre Expiry Friday Strategy. However the option value at $2.63 does not represent 20% of the purchase price ($2.50) so I do not know what to do other than do nothing and watch it as it enters week 2-3.
Meanwhile perhaps move on to another trade from the list or would you advise waiting for next week’s report. I ask this question because although I am paper trading but would like to make and keep rules and routines for myself that would be appropriate for the use of my live account. Therefore it is important for me to know whether as I approach the end of a week I should always wait for the new report before further investing.
What would you advise?
I hope you understand that I cannot give financial advice in this venue but I can makde some general comments:
1- The 20/10% guidelines apply when the stock price goes down. In this case it has accelerated. As I write this response AMBA (I have this one too) is trading @ $44.80.
2- In a case like this we look for the time value of the premium to approach zero (all or mostly intrinsic value-see pages 264-271 of the Encyclopedia…). If you can close around $3.80 and sell the stock, you will have maxed the trade and now have your money back to enter a new trade in the same month with the same cash. Look for my blog article coming out this weekend for more.
3- In the BCI methodology, if the 20/10% guidelines and the MCU exit strategies do not apply, no action is needed.
Keep up the good work.
Looks like an awesome trip! Glad you are out there enjoying yourself. Thanks to you for sharing your knowledge we have an opportunity to create this kind freedom. Thank you!
Thanks Nate…Utah would be a great trip too!