Webinar: Covered Calls From a Different Perspective

I'm, presenting a one hour webinar next week.  I'll be taking a look at an old favorite, covered call writing.  But this time the discussion takes a non-traditional course.


Tuesday, February 16;  5pm
ET

Covered Call Writing: From a Different Perspective

Register for this webinar.


From the announcement by Trade King:

Which option to write?  Should you write ITM or OTM calls?

Do you have trouble when the stock
rallies and want additional profits?

Do you hate it when the call moves into
the money and you regret selling it?

Join Mark as he provides
critical explanations to these and many more questions about covered
call writing.

For Rookies.

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3 Responses to Webinar: Covered Calls From a Different Perspective

  1. Andy 02/14/2010 at 6:33 PM #

    Mark,
    Looking forward to your seminar on covered call writing. It’s a topic I would appreciate learning more about… most of my stocks are ‘blue chips’ (at&t, microsoft, j&j) and I rarely write covered calls against them because the premiums are just too low for CTM calls (.05-.15), and I only own 100-300 shares of each. Perhaps ITM calls would be an option?
    Anyway, lately I’ve been rethinking my idea of ‘risk management’. I’ve presumed out of the money 10 point spreads with low deltas are ‘safer’ than closer to the money 10 point spreads; subsequently I’ve only sold 2 month spreads and condors with total deltas of 15 for about 1-1.5 bucks each. My understanding is that I will have more winning trades, though with lower percentage gains on the money risked.
    Today, I began to think about what you’ve described as ‘black swan’ events, where I will inevitably lose all 10 dollars in my 10 point spreads… These events seem to be the true risk factor for options investors; with this in mind, strike price begins to seem less important than simply the distance between spread points. From this viewpoint, closer to the money options now seem ‘safer’ because the premiums are much higher and thus the money lost in black swan events is less.
    I plan on exploring the idea of turning my spreads into kites, this might be the best solution to the swan problem.

  2. Mark Wolfinger 02/14/2010 at 7:24 PM #

    1)Kites are not cheap, but they do provide black swan protection
    2)It’s a constant problem for investors: Less risk means less reward.
    But, when options are priced fairly, there is no edge in trading. If you have no edge, you cannot expect to win.
    To me the edge must come from taking advantage of good risk management.
    3) ‘Safer’ is a relative word. Farther OTM options are ‘safer’ from the perspective of losing less often. But they are ‘less safe’ when you consider how much can be lost.
    It’s a trade-off, comfort zone decision.

  3. Elite MD 09/03/2011 at 11:37 AM #

    Kites are certainly not cheap, the protection is good.
    In response to what @Mark said.
    Investors can be a constant problem. You have to have an edge if you want to take advantage.
    Excellent article in good risk manager.