The Blue Collar Investor

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It is not true that the maximum profit we can generate with a cash-secured put trade is the original put premium. Blue Collar Investors have an arsenal of

Alan,

Using your covered call video example, the ITM premium is $8.05, but that is made up of $7.30 of intrinsic value and $0.75 of time value. So, if we buy back the option when its price falls to $1.60 (20% BTC) that $1.60 consists of all time value or upside in the transaction ($0.75) and the remaining $0.85 in intrinsic value. So, if we’re trading 5 contra...

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Calculating initial returns for our covered call writing & cash-secured put trades is intuitive and straightforward. For puts, we divide the premium by the difference between the put strike and the put premium:

% initial put return = [(put premium/ (put st...

Portfolio overwriting is a covered call writing-like strategy where we seek to generate additional portfolio income by selling deep OTM call options, unlikely to expire in-the-money.

This podcast will analyze a strategy using implied volatility and the BCI Expected Price Movement Calculator to select strikes that have approximately an 84% probability of success...

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When selling cash-secured puts (or covered calls), large dollar premiums are enticing....