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Tag: Covered Call

  • What is Option Assignment and Is it always bad?

    What is Option Assignment and Is it always bad?

    Option Assignment is one word that a lot of option traders are scared of. For a primer of what is an option assignment, let me share the basic concept first. This is a detailed explanation from The Options Industry Council. You may also learn more from Pete here. The option holder has the right to…

  • How to Trade Fear

    So you have been watching this “interesting” stock market. One day down, next day up and in the end you don’t seem to find any “wealth effect” in your stock portfolio. And then there is this marvelous VIX, Uncle Ben’s bullish notes about subdued inflation, bullish economic data and you think everything seems to be…

  • How to Play Transocean (RIG) via OptionTrading

    How to play elevated Implied Volatility on Transocean (RIG), was a key question in lot of trader’s mind. In fact, it still is. This post is about one of the option + stock trading strategy that can be employed to play such scenarios assuming you are willing to hold the stock for long term. A…

  • OPNewsletter (Jul’09) +3.55%

    Last week markets tried very hard to rally but ended in negative territory. Market’s character can now be defined by more of “withdrawal of demand” vs anything else. For overall OPNewsletter, we have invested 38.7% of assumed 10K capital. As of last Friday close, we are up +3.55% x-commissions and +2.2% including commissions. I usually…

  • OPNewsletter Jun’09 is up 7.34% (Open)

    A week in which Dow moved between +2.5% to -1.75%, S&P500 from +3.25% to -1.5% and RUT from +4.75% to -1.50%, and all closing in negative territory, OPNewsletter gained +2% that too after increasing capital investment by 36% over last week. Overall OPN is up +7.35% (x- brokerage commissions) and +5.3% (including commissions). This excludes…

  • OPNewsletter : May’09 (+11.2%), Jun’09 (Opening Shortly)

    It feels great when a single covered call option spread (done only @ 7.3% of 10K portfolio) can deliver OPNewsletter monthly subscription fee, cover commissions and still deliver profits, without making adjustments throughout the holding period. And what if the newsletter doesn’t get a single cent if doesn’t deliver profits? Welcome to OPNewsletter (A “No…

  • Bank of America (BAC) : A Speculative Trade

    Before I start the post, let me warn that trading into financial is full of risks and you may lose your capital. You should make sure that you have a proper risk management plan in place to handle this and should only invest what you might be willing to lose 100%. And this particular trade…

  • GM Doesn’t Need Money

    AP reports that General Motor’s (GM) CFO says they don’t need $2billions as cost cutting is bearing fruits. Quite interesting, and possibly a good sign for GM’s survival. But I think more than cost cutting, they need to have cutting edge car models and this cutting edge doesn’t mean high tech, but the models that…

  • Option Business aka Insurance Business

    A bounce is due, no, I think overdue. We have all realized that Mr. Market can remain irrational longer than one can remain solvent. So though the probability of bounce is high, don’t count on it for long term bull market till there are sign of economic improvement. The primary trend is bearish, as clear…

  • Early Warning Signpost

    A few months back I shared big picture and mentioned key points to watch out for a Bear market signal. A lot has happened since then, but I still haven’t opened OPValue Portfolio (new). At the same time, nothing much has changed in the markets and we are almost closer to the earlier lows. I…