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How to Enter & Calculate Rolling-Out-And-Down Cash-Secured Put Trades: A Real-Life Example with Invesco QQQ Trust (Nasdaq: QQQ) – January 09, 2023
When selling out-of-the-money (OTM) cash-secured puts, we calculate our initial time-value returns with this formula: % return = Put premium/ (put strike – put premium) When incorporating exit strategies...
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Rolling-Up Our Cash-Secured Put Trades: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY) – January 3, 2023
When we sell cash-secured puts, we are seeking to generate cash flow or buy securities at a discount. It is generally written that the maximum return for these trades is the...
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Exercising Call Options to Capture Dividends: A Reasonable Action or Investor Error? – December 27, 2022
Dividend capture is the main reason for early exercise of our covered call writing trades. More specifically, ex-dividend dates are the times most susceptible to early exercise and having our shares sold at the strike price....
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Calculating Mid-Contract Put-Selling Trade Status + A New Covered Call Writing Strategy Coming Soon – December 19, 2022
After entering our put-selling trades, we can calculate the current status of our trades mid-contract with a few simple entries into our Trade Management Calculator. In this article, a real-life...
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Calculating Mid-Contract Covered Call Writing Trade Status: A Real-Life Example with Bristol-Myers Squibb Comp. (NYSE: BMY) – December 12, 2022
After entering our covered call writing and put-selling trades, we can calculate the current status of our trades mid-contract with a few simple entries into our Trade Management Calculator. In this article,...
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Reverse Covered Call Writing: A Reasonable Bear Market Strategy? A Real-Life Example with SPDR S&P ETF Trust (NYSE: SPY) – December 05, 2022
Covered call writing is defined as first purchasing or already owning the underlying security and then selling the corresponding call option. By doing so, we are protected; we know...
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The Significance of Breakeven When Constructing Our Poor Man’s Covered Call (PMCC) Trades: A Real-Life Example with International Business Machines Corp. (NYSE: IBM) – November 28, 2022
The PMCC Strategy involves buying LEAPS call options (expirations 1 – 2 years out) and selling short-term call options against the long position. The technical term is a long call diagonal debit...
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Entering and Adjusting Our Covered Call Trades Using the BCI Trade Management Calculator: A Real-Life Example with WBA – November 21, 2022
Entering, managing and archiving our covered call writing and put-selling trades are critical to our overall success as well as allowing us to learn and benefit from our investment...
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Why Did Option Value Decline After Stock Price Accelerated? A Real-Life Example with United Health Group Inc. (NYSE: UNH) – November 07, 2022
We, as covered call writers and sellers of cash-secured puts, are on the sell-side of options. Every so often, I receive interesting emails with educational value from members who...
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Evaluating Pre- and Post-Market Opening Calculations; A Real-Life Example with The Simply Good Foods Company: (Nasdaq: SMPL) – October 31, 2022
Preparing for our initial covered call writing and cash-secured put trades starts pre-market. After developing a watchlist of eligible securities, we turn to the option-chains to determine if initial time-value returns align with...
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