Covered Call Options Education w/ the Zecco Zirens
Zecco's latest video promoting covered call trading on their platform has all the essential elements of a good marketing campaign -- power (of options), money (from premium income), and sex appeal.
Technorati Tags: Zecco, Zirens, video, basics, covered call
From OneMinuteU.com, here's a short promo video on Ultra Investing with Options.
Checkout P. M. Batty's preview on Issuu.com of Covered Calls: Consistent Cash Flow. Batty describes the upcoming book as a "cradle to grave guideline for trading covered calls. It teaches methods which generate 3% to 12% per month return in the stock market." The book is copyrighted by Turbo Trainer, LLC and published by Amazon's affiliate, Book Surge Publishing. At the time of this posting, however, the book was not yet available for purchase from BookSurge. (Since our original posting, the book has been pulled from Issuu.com.)
Do you enjoy discussion forums about covered calls but are looking for an easier way to monitor the various discussion boards? Try the free service offered by BoardReader, founded by engineers and students at the University of Michigan in 2000. Developed to address the shortcoming of search engines to adequately search web forums and messages board, BoardReader is seeking to create "the largest repository of searchable information" for message board users.
Below is a monthly chart (September 2, 2007- March 2, 2008) indicating the number of posts containing the phrase "covered calls" on the various BoardReader message boards.
OptionsXpress is offering a webinar entitled, A New Look at Covered Call Writing: Trading Diagonal Spreads in Lieu of the Conventional Covered Call Approach, on Wednesday, December 19th at 1:00 pm Central Standard Time.
The one-hour webinar, presented by special guest Steve Meizinger of the International Securities Exchange, promises to "provide a fresh approach and give new insights" into covered call writing. Specifically, Meizinger will show which options to sell, how and when to roll the covered call, and how LEAPS may be used as stock substitutes. Meizinger is a Director of Education at the ISE and is a writer for the Options Industry Council. The webinar is open to the public and requires pre-registration.
OptionsXpress has offered other covered call webinars in the past. In September, OptionsXpress conducted Covered Calls: A Strategy Aimed to Help you Generate and Protect Income, which we wrote about earlier.
Looking for an excellent primer on the basics of call options, then read the three-part series on the Million Dollar Journey. The first article, How Call Options Work I - The Basics, reviews the definition, expiration date, strike price, and in-, at-, and out-of-the-money concepts. The second artice, How Call Options Work II - Examples, provides several realistic scenarios including the concept of time value of money. The final article, How Call Options Work III - Call Option Writing, explains the process of writing covered calls. Whether you are a novice or professional at covered call writing, it's worth the read.
Covered Call news offerings for today:
The Options Insider has a two-part series on Managing a Covered Call Portfolio. Part III is still in works.
Business Line suggest covered calls a hedge against equity risk and way to lock in gains.
Rick Aristotle Munarriz, writing for The Motley Fool, considers the Gateway Fund (GATEX) "produces some of the best risk-adjusted returns in the business."
Why don't value investors write more covered calls? Follow the discussion thread on The 2+2 Forums.
HowToMakeThousandsDaytrading.com has a basic article on covered call writing entitled, "How to Create Income from Stock Your Already Own."
Value Line maintains a Model Covered Call Portfolio. However, protecting that portfolio in a bear market can be a challenge since downside risk remains. Value Line has a few suggestions on how the covered call investor can protect their portfolio. The article, Utlizing Put Options in Our Model Covered Call Portfolio, suggest writing cash covered puts to earn additional premium or retrieve a "called away" stock.
Covered Call news offerings for today:
Part III of the Million Dollar Journey series on How Call Options Work examines call option writing.
My Trader's Journal advises a reader on strategies for preserving capital during a market decline.
The Millionaire Now! recommends using covered calls to generate cash flow as we approach the end of the Grand Supercycle.
New eHow.com article on How to Implement Covered Call Ratio Spread.
High Probability Trading explores Covered Leap writing.
Stock Option Volatility Trading offers a covered call calculator.
My Trader's Journal is uncovering their Boeing (BA) calls.
ShareMarket Investments established the following positions: BJS Dec 07 25 call; SBUX Dec 07 22.50 call; IP Dec 07 32.5 call; NTAP Dec 07 25 call; AEO Dec 07 22.5; TIE Dec 07 25 call; SNDK Dec 07 35 call (as of November 19, 2007).
The Covered Calls Advisor established new positions in Celanese (CE), Intel (INTC), and Kinetic Concepts (KCI).
Adam Milton of About.com:Day Trading has an article on basic option strategies including a section on the Short Covered Call.
New YouTube testimonial video from Cash For Life.
Covered call strategies work best in a neutral or bull market. The chart above certainly illustrates this point well. The bold red line marks the performance of the S&P 500 Covered Call Index while the bold green line marks the S&P 500 Index. In June, Seeking Alpha ran an article on "An In Depth Look at the New Covered Call ETFs," reviewing the year's first-half performance of seveal new covered call ETFs: Advent/Claymore Enhanced Growth & Income (LCM); Enhanced S&P 500 Covered Call Fund (BEO); Dow 30 Premium & Dividend Income (DPD); First Trust/Fiduciary Asset Management Covered Call Fund (FFA) ; Madison/Claymore Covered Call Fund (MCN); and the S&P 500 Covered Call Fund Inc (BEP). The BEP outperformed the S&P 500 Index in the first half of 2007, however the BEP has lagged in the latter half of the year.
As of November 23, 2007, year-to-date performance for the S&P 500 is 1.58%, compared with -10.98% for the S&P 500 Covered Call Index (BEP). Two of the covered call ETFs review outperformed the BEP, the Dow 30 Premium & Divident Income which is running -7.47% for the year and the First Trust/Fiduciary Asset Management Covered Call Fund (FFA) at -9.04%. Lagging the S&P 500 Covered Call Index (BEP) are the Advent/Claymore Enhanced Growth&Income (LCM) at -12.59% and the Madison/Claymore Covered Call Fund (MCN) at -18.98%. Dividends are not accounted for the YTD calculations.
Jennifer Openshaw of WinningAdvice.com has focused recently on sharing the covered call strategy with her audience through a series of articles and videos. Most recent has been a couple of articles appearing on MarketWatch.com on selling covered calls and deep in the money covered calls. However, in August she produced the following video on covered call funds for TheStreet.com. Titled "Covered Calls the Fund Way," the video talks about the advantage of letting the pros implement the covered call strategy for the investor.
Many of the ideas presented here can also be found in an earlier covered call funds article written for TheStreet.com. Several covered call funds are mentioned including the Madison Claymore Covered Call Fund (MCN), the First Trust Fiduciary Asset Management Covered Call Fund (FFA), and the ING Global Equity and Premium Opportunity Fund (IGD).
Market Intelligence Center: January '08 85 covered call on (GRMN) for 11.99% assigned return and 11.33% downside protection (as of November 15, 2007); February '08 40 covered call on Ventas (VTR) for 3% assigned return and 8.7% downside protection (as of November 16, 2007); and the January '08 55 covered call for United Health Group (UNH) for 5.95% assigned returned with 2.8% downside protection (as of November 23, 2007).
Blogging Stocks MSFT: January '08 covered call on Comcast (CMCSA) for a 6.3% return with 5% downside protection (as of November 15, 2007).
Stock Split Today: December '07 55 covered call on Compania De Minas Buenaventura (BVN) for 7% assigned return.
Zacks.com: April '08 35 covered call on Microsoft (MSFT) for 9.72% assigned return with 6.42% downside protection (as of November 19, 2007).
The Value Line article, Utilizing Put Options in our Model Covered Call Portfolio, reported on September 10, 2007 that its Model Covered Call Portfolio outperformed the Dow and S&P 500 in August as well as June and July 2007, after underperforming earlier in the year. Value Line concludes the the performance in recent months "supports our thesis that our Model Covered Calls Portfolio will outperform the stock market in bearish, neutral, and a modestly bullish environment."
Title: Options Corner: Create a Covered Call Without Owning the Stock
Source: TheStreet.com
Date: August 27, 2007
File Format: Embedded video
Description:
Steve Smith of the TheStreet.com speaks with Fasi Filiagia, CEO of SpreadTradeSystems.com, on creating a covered call from longer term equity options and LEAPS. He discusses their service offerings, the importance of exit strategies, creating covered calls with LEAPs, and ratio spreads.
Title: Value Line Educational Programming Video --
The Value Line Daily Option Survey Program 6: Writing Covered Calls
Source: Value Line (Link to all Value Line Webcast)
Date: n/a
File Format: RealPlayer, Windows Media, HTML
Description:
Title: Value Line Educational Programming Video --
The Value Line Daily Option Survey Program 7: Combining Covered Calls With Other Strategies
Source: Value Line (Link to all Value Line Webcast)
Date: n/a
File Format: RealPlayer, Windows Media, HTML
Description:
Listen to a CFA Institute webcast entitled "Options for Enhancing Returns" through covered calls developed by the Los Angeles Society of Financial Analysts (presented June 23, 2005). The 61 minute webcast was recorded March 23, 2005. Presenter Walter V. Haslett, Jr., CFA addressed the Foundations for option analysis, position analysis for the strategies, and selecting the proper option. Haslett is president and chief investment officer of Write Capital Management, LLC, a derivatives-based investment management firm.
Title: Options for Enhancing Returns
Source: CFA Institute
Date: June 23, 2005
File Type: WMA
Bernie Schaeffer is offering a 21-page except from Chapter 6: Covered Calls of his Mastering Advanced Options Strategies text used in the Advanced Home Study Program.
Title: Chapter 6: Covered Calls in Mastering Advanced Options Strategies
Source: Schaeffer's Research
Date:
Type File: PDF
Title: Risk and Return Characteristics of the Buy-Write Strategy on the Russell 2000 Index
Source: OIC
Date: April 2007
Type File: PDF
Major Points:
Using data from January 18, 1996 to November 16, 2006, a study by Kapadia and Szado demonstrated that a passive buy-write strategy of one month to expiration calls on the Russell 2000 Index consistently outperformed the index on a risk-adjusted basis. Over the 10-year study period, the Russell 2000 Index had an annualized return of 10.67% while the 2% out-of-the money (“OTM”) buy-write strategy on the Russell 2000 returned an almost identical annualized 10.60% and an at-the-money (“ATM”) buy-write returned an annualized 9.21%. These buy-write returns were produced with a significant reduction of annualized volatility. The ATM buy-write strategy yielded a one-third lower annualized volatility of 13.36% compared to 20.52% for the Russell 2000 and 14.85% for the OTM strategy
