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In-The-Money Strikes and Covered Call Writing
Option trading basics incorporates fundamental, technical and common sense decisions. One of these, as it relates to covered call writing, is selecting a strike price for the short options position. In...
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Selecting The Best Strike Price
In last week’s article concerning option trading basics I highlighted the in-the-money strike in our covered call writing strategy. In this article I will expand our options calculations to all three...
View ArticleAsk Alan – Using the Nasdaq 100 (QQQ) for Covered Call Writing
Alan answers a question from Joe of Dallas, Texas. Joe asks: “I just finished reading Cashing in on Covered Calls and loved it! In the book you mention that you used the Qs in your mother’s account....
View ArticleAsk Alan – When calculating time value, do we use the bid, ask or last prices?
Alan answers a question submitted by Bill from Pittsburgh, PA, who asks: “What is the best price to use when calculating the percent remaining time value in a covered call; the bid, the ask, or the...
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Setting Up Your Covered Call Portfolio Using The Ellman Calculator
Covered call writing involves options calculations…there’s no getting around it! It’s been a while since we talked math. What’s with all the frowns? Mastering and understanding the calculations (The...
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Covered Call Writing: The Case For 1-Month Options
I sell predominantly 1-month options when selling covered calls. This decision was NOT based on anything I read or was told, but rather on experience and common sense. Most stocks with options have at...
View ArticleAsk Alan – Is It Too Expensive To Buy Back The Options When The Stock Price...
Alan answers a question posed by Al from Melbourne, Florida. who asks: “One of my first option choices was to sell 5 positions on HTZ with a strike price of $20. When I opened the position, HTZ was...
View ArticleAsk Alan – How Do We Make Use Of Intrinsic Value
Alan answers a question shared by Keith, who asks: “Do we care about intrinsic value when selecting and exiting stocks? If so, what is the best way to calculate and make use of it?” If you want more...
View ArticleAsk Alan – Using Stocks With Mixed Technicals
Alan answers a question shared by Adrian and others, who ask: “Do you think I should buy shares if the technicals are mixed and are not ‘bold-listed’ stocks in your Premium Stock Reports?” If you want...
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Achieving The Highest Covered Call Writing Returns Using The Blackjack Analogy
Covered call writers and all investors using stock options strategies have one thing in common: we all want to achieve the highest possible returns within the framework of our own personal risk...
View ArticleAsk Alan – How Do We Calculate Upside Potential?
Alan answers a question shared by William, who asks: “I appreciate the spreadsheets you sent especially the calculator. I have pretty much figured out all of the calculations except the line-item...
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Option Premiums: How Intrinsic Value Protects Time Value
Meaningful option calculations are essential in determining if the premiums meet our goals. To this end, we must understand the mathematics of these calculations to become elite covered call writers....
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Exit Strategy Calculations vs. Final Calculations
Mastering options calculations is an essential skill needed to attain the very highest covered call writing returns. Although the Ellman Calculator will do most of the heavy lifting for us,...
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Exit Strategy Calculations vs. Final Calculations
Mastering options calculations is an essential skill needed to attain the very highest covered call writing returns. Although the Ellman Calculator will do most of the heavy lifting for us,...
View ArticleAsk Alan – Is It Too Expensive To Buy Back The Options When The Stock Price...
Alan answers a question posed by Al from Melbourne, Florida. who asks: “One of my first option choices was to sell 5 positions on HTZ with a strike price of $20. When I opened the position, HTZ was...
View ArticleAsk Alan – Are We Losing Money When the Stock Price Goes Up?
Alan answers a question shared by Greg, who asks: “On the Intro tab of the Ellman Calculator I believe there is a mistake. In Part B of selling OTM calls the stock closes at $61.50 and you add the...
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Combining Technical Analysis And Market Assessment To Determine Strike Selection
Mastering stock and strike price selection are key components in successful covered call writing. There is no one factor that will dictate our choices but rather a mosaic of bits of information which...
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Ellman Calculator: Enhancements Made In The 2014 Version
Options calculations are an integral part of our BCI methodology both in guiding us in making the best investment decisions and also in determining our trading success. To assist in achieving these...
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Calculating 2-Month Returns When Rolling Out And Up
Options calculations will give us an accurate assessment of our covered call writing profits. It’s more meaningful to use percentages rather than dollar amounts when executing these calculations. For...
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Writing Covered Calls On Broad Market Exchange-Traded Funds
The initial main step for covered call writers is to select the best underlying security. This choice will vary from investor to investor based on goals and risk tolerance. Some of our members prefer...
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