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Factors that Influence Option Value + The Black-Scholes Model
An integral part of understanding option trading basics, is mastering the components that influence option value. Many option traders will look to make money as a result of a discrepancy between an...
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The CBOE BuyWrite Index (BXM) vs. The BCI System
Several studies have been undertaken to determine the effectiveness of the covered call writing strategy. I believe that it is important to evaluate the parameters that are used as well as how they are...
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Implied Volatility: More Important Than Historical Volatility To Covered Call...
Understanding the concept of implied volatility is essential for successful covered call writing and selling puts. First, implied volatility gives us a window into the “market’s” perception of future...
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How To Use Implied Volatility In Our Covered Call Writing Decisions
Understanding the Greeks, or factors that impact the value of our covered call premiums, is essential to mastering options trading basics and becoming an elite covered call writer. One of the Greeks...
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Using Volatility to Predict Future Stock Prices
Volatility is a key consideration for both stock selection and option-selling decisions. Despite its relevance to our covered call writing and put-selling selections, volatility does have its...
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Comparing Implied Volatility and Historical Volatility During Earnings Season
When selecting stocks and options for covered call writing and put-selling we factor in volatility, both implied and historical. Historical Volatility (HV) is the actual volatility of a security over a...
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Implied Volatility and Expected Price Movement of our Stocks During the Life...
Implied volatility (IV) is directly related to the value of the premiums we receive when selling covered call and put options. The more volatile the underlying security, the greater the premium and...
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