Traders, even those focused on the relatively low-risk covered call, all too often overlook the great advantages of the uncovered put. This is not a high-risk strategy. The market risk is identical to that of the covered call. In this and the next three articles, the short put is analyzed and compared. This article focuses… [READ MORE]

Covered calls are considered universally safe. They create profits from option premium, capital gains and dividends. Some traders believe the covered call is so safe that it can be opened at any time. This is flawed thinking. If the stock price falls below your net basis, you have a paper loss. (Net basis is the… [READ MORE]

When you write covered calls, you can produce greater profits by writing six two-month covered calls per year, than you will realize writing one 12-month covered call per year. Time decay for further-out options is quite slow, so writing options more than few months away is equal to lost time. Based solely on option premium… [READ MORE]

  The inevitable question every options trader faces: “Is it high risk?” In evaluating a strategy, traders tend to put the risk label on everything. However, it examining the attributes that increase or decrease risk, the test should not be based on a trade’s attributes but on the situation. The chart of is used… [READ MORE]