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The JPM Collar is a recurring options strategy used by a major institutional investor whose position is so large that it has become somewhat well-known in the options world.
It has been speculated that it can influence short-term market flows in the S&P 500 optio...
To answer this question, bear with me as I go over some introductory concepts from the beginning for completeness, even though I know many of you already know this.
When an investor sells a put option, they collect a premium upfront.
In exchange, they agre...
When investors view covered call assignment as a normal, healthy outcome, they begin choosing better strike prices and generating more consistent income rather than fearing assignment.
Let’s look at how to pick the best strike for the covered call based on the investor...
You’ve sold a covered call and collected premium.
Great start.
But what happens when the stock moves against you?
Do you just watch your shares get called away?
Accept a capped upside?
Let losses run?
The answer is simple: you adjust.
After nearly 21 years of trading
Many investors new to covered calls worry about “getting assigned.”
But in reality, the assignment is usually just the strategy working as intended.
Whenever an investor is assigned on a covered call, they have made money.
It doesn’t matter w...