Safe-Option-Trading-Income Blog

Aug 30, Corning: A covered call opportunity?

Mon, 30 Aug 2010 00:11:16 GMT

Have a look at Corning (GLW) on a daily chart. Over the last few months it's traded in a range from about $16/share to about $19/share. It's at the bottom end of its range now. If this type of issue fits your trading style and trading plan, it might be a good candidate for a covered-call or cash-secured-put trade. Also of interest, GLW options are valued a $1 increment strikes. This makes the versatility of options even more interesting. As always, this is not a recommendation but an idea for your consideration.

Aug 20, A GOOD STOCK SCREENER

Fri, 20 Aug 2010 13:29:20 GMT

How do you find covered call and cash-secured put candidates for trading? One method I use is computerized stock screening, preferably those that are freely available. If using stock screeners appeals to you, consider the one available at the NASDAQ website. One of the parameters you can screen for is "beta". Stocks with high beta values are more volatile than the average stock, and if they have associated options, the options can have relatively high premiums. Using stock screeners is part of my trading plan and the NASDAQ screener works for me. Oh, and by the way, it covers NYSE and AMEX as well as NASDAQ issues.

Aug 19, Education Stocks

Thu, 19 Aug 2010 01:33:13 GMT

Friends, The for-profit education stocks (e.g. APOL, DV, COCO, LUPE, APEI) have really taken a monster hit over the past few days. Looks like a massive sell-off to me, driving these stocks down to some very low prices. The high volatility has made for some very attractive premiums in their calls and puts. Consider whether cash-secured puts or covered calls in these issues might make sense for you according to your own personal trading plan.

Aug 8, Great Covered Call Discussion

Sun, 08 Aug 2010 12:10:20 GMT

I have mentioned the "Just Covered Calls" Yahoo! Group on this site before. Once again, an excellent educational discussion has ensued about the finer points of selling out-of-the-money covered calls. Mant thanks to Jeff Partlow and other regulars at this site for their contributions. If you're new - or not so new to covered-call trading -it is worth your while to visit and learn.

Aug 1, American's Credit Ratings are Falling

Sun, 01 Aug 2010 11:22:39 GMT

Debt is an issue to keep in mind when thinking about the Big Picture against which we conduct our trading. From the Seeking Alpha website: Although the debt rating of the US is still triple A, the debt rating of individual Americans is not so healthy. According to the article 25 of Americans have a credit score less than 600. This has real implications for sustained economic growth and it will be interesting to continue to monitor this trend.

Jul 28, Napoleon Hill

Wed, 28 Jul 2010 12:55:51 GMT

An outline of the philosphy for success espoused by Napoleon Hill

Jul 21, Great Market Visualization Tool

Wed, 21 Jul 2010 20:13:19 GMT

Folks, I enjoy visual depictions of the market. It helps me spot anomalies in the marketplace that I may be able to translate into a safe-option trade. Take a look at the link provided. The folks at FINVIZ, a great free site, have a "Bubble Map" of the market. It shows the deviations of most stocks and ETF's relative to the average market movement. It is great to spot "outliers", that is stocks which have moved quite a bit, either up or down, relative to others. You may find this information helpful in conjucntion with other screening criteria to help identify option-selling opportunities. Usually these big movers will have an increase in implied volatility and hence higher option premiums.

Jul 14, Short Strangle Made Safer

Wed, 14 Jul 2010 22:37:16 GMT

How to make a short strangle safer

Jul 12, Options Trading 201

Mon, 12 Jul 2010 01:04:42 GMT

The next step: options Trading 201

Jul 11, Blue Chip Stocks

Sun, 11 Jul 2010 21:40:32 GMT

Obtain a portfolio of Blue Chip Stocks and get paid to do it.

Jul 11, Brett Steenbarger

Sun, 11 Jul 2010 18:04:23 GMT

Dr. Brett Steenbarger: Contributions to Trading Excellence

Jul 11, Mark Douglas

Sun, 11 Jul 2010 00:08:11 GMT

Trading wisdom from Mark Douglas

Jul 8, Mortgages at a 5 decade low

Thu, 08 Jul 2010 23:56:50 GMT

Although this is a site about options, we look at all things financial. If you are in the market for a mortgage now may be the time to act. Take a look at the link provided. A 30-year fixed-rate mortgage is now going for 4.57.

Jul 8, Great article on Implied Volatility

Thu, 08 Jul 2010 12:14:28 GMT

For an excellent discussion on Implied Volatility see the referenced link. This is good reading.

Jul 6, Jack Schwager

Tue, 06 Jul 2010 22:00:15 GMT

Jack Schwager, author of Market Wizards

Jul 6, Weekly Options

Tue, 06 Jul 2010 01:15:04 GMT

An introduction to weekly options and their potential in the safe-option trader's toolkit.

Jul 5, Options Investing: Questions and Answers

Mon, 05 Jul 2010 17:59:20 GMT

Q & A we have answered about Options Investing

Jul 3, Trading Rules from Slope of Hope Blog

Sat, 03 Jul 2010 14:36:36 GMT

Friends, I was web surfing and came across this insightful list of considerations for developing your trading plan. See if any of these resonate with you. Thanks to Tim Knight of the Slope of Hope blog.

Jun 27, BP

Sun, 27 Jun 2010 01:57:49 GMT

For anyone with a position in BP, or contemplating one, check out this article from Seeking Alpha.

Jun 27, Van Tharp

Sun, 27 Jun 2010 01:11:20 GMT

Van Tharp: Trading coach and author

Jun 25, EXXON (XOM)

Fri, 25 Jun 2010 00:51:32 GMT

We do not provide tips or recommendations here at safe-options-trading-income. We do, however, like to point out interesting ideas for your consideration. Exxon is a very stable, solid blue-chip that pays a respectable 2.88 dividend. The stock has been down sharply for the past four days and is nearing it's 52-week low of 58.46. If you are looking to sell puts to acquire stock at what appears to be a value price, then consider writing some cash-secured puts at a $55 strike or thereabouts. Watch the daily chart to how far down it goes and when it begins to turn back consider a put sale if it fits into your personal trading plan.

Jun 20, Nassim Nicholas Taleb

Sun, 20 Jun 2010 20:34:46 GMT

Nassim Nicholas Taleb: Applied statistician, trader, and philosopher

Jun 20, Alexander Elder

Sun, 20 Jun 2010 00:35:29 GMT

Alexander Elder: Psychiatrist, Trader and Writer

Jun 16, Wise Guys in the World of Safe Options Trading

Wed, 16 Jun 2010 23:31:06 GMT

Meet the Wise Guys: The safe-options-trading Hall of Fame

Jun 11, Weekly Options

Fri, 11 Jun 2010 12:10:26 GMT

For those with an interest in Weekly Options: The Chicago Board Options Exchange (CBOE) today announced that on Friday, June 4, 2010, it will begin trading new weekly options on four exchange traded funds (ETFs) Standard and Poors Depositary Receipts (SPY), Nasdaq-100 Index Tracking Stock (QQQQ), DIAMONDS Trust, Series 1 (DIA), and iShares Russell 2000 Index Fund (IWM), are now traded. Thanks to RandyH for positing this on the "Justcoveredcalls" Yahoo Group. optionhouse.com

Jun 8, Cash-Secured Put Candidates

Tue, 08 Jun 2010 11:49:24 GMT

optionhouse.com As the correction progresses from the April highs, it may be a good idea to consider what quality stocks you'd like to own and at what price. The link provided gives a short synopsis on five dividend-paying blue chips: KO, JNJ, KFT, MCD, and WM. I am not recommending you buy them now, I am suggesting you consider these in light of your written trading plan. If they fit into your plan, at what price would they become good value? Consider writing cash-secured puts at the price you like to acquire these (or others that fit you plan) and be paid while you wait.

Jun 3, May Stock Market and Your Trading Plan

Thu, 03 Jun 2010 09:50:57 GMT

So, how did you do in the month of May? Many trading accounts were down. The stock market was volatile and not heading north. I like to use these times to check back on my written trading plan. Here are a few questions that I asked myself and wrote answers to in my trading journal: Did I follow my plan? If not, why not? Does my plan have contingencies if my positions move againt me? Did I follow them? What is the maximum loss I am willing to take on every position? For covered calls and cash-secured puts: Do I have adequate safety nets in place to protect my capital? Do I use protective puts? Should I? Are there some great stocks I'd like to own that have been beaten down a bit? Is there good opportunity here for selling cash-secured puts to acquire these?

May 15, Good Options Brokers for your Consideration

Sat, 15 May 2010 22:07:38 GMT

From time to time I get questions by folks regarding which brokers are good for options traders. The key is finding an outfit that combines good service with low costs. Take a look at Trade King and Zecco. . Also consider Fidelity, OptionsXpress and Interactive Brokers. One or two of these brokerages may fit your needs.

May 12, Insight into last week's market volatility

Wed, 12 May 2010 12:04:29 GMT

Was anybody surpriseed by the volatility late last week in the US market? Anybody hurt by it? Wonder what caused it? We've been treated to ideas pushing the blame on computers run amok, a fat-fingered order mis-entry and other likely causes as well. The recent article in the Pragmatic Capitalist, link provided, brings us back to the root cause of market mahem: fear and greed. I found this article refreshing and insightful, and grounding us back into the real causes of behavior in the markets. Happy reading!

May 8, More ideas for dividend paying stocks

Sat, 08 May 2010 22:16:20 GMT

Here's a nice article in dividendsvalue.com on dividend-paying stocks whose dividends are progressively growing in size. Again, these might be a nice fit for covered call investors with a long-term horizon. Consider acquiring these by selling cash-secured puts. Then, if assigned, consider selling medium- to long-dated out-of-the-money calls against them. Put yourself in a position to capture option premium, dividend income, and capital gain. Thanks to the My Covered Call Blog (http://coveredwriter.blogspot.com), where this link was posted as a recommended article.

May 2, Excellent article on the economy versus the stock market

Sun, 02 May 2010 16:26:06 GMT

Many folks have been wondering why the stock market continues to rally so powerfully in the face of other news that shows the US and global economic picture is not so robust. Check out this article by the Boeckh Investment Newsletter as posted in the Pragmatic Capitalist website recently. This is a well researched piece. As they say: the global rally has "occurred against an unsettling, uncertain and unbalanced macroeconomic backdrop". They attribute the continued rise in the market - to the complete mystification of the bears - to the unprecedented fuel of rock-bottom interest rates and the dramatic improvement in the health of much of the corporate sector. Have a read of this very insightful article.

Apr 25, TraderFeed Blog is winding down

Sun, 25 Apr 2010 01:35:07 GMT

I'm sad to report that Dr. Brett Steenbarger has decided to begin winding down the TraderFeed Blog. This blog has been the source of numerous insightful and valuable posts over the years. His reason: he will be making a career change. Safe-options-trading-income wishes him the very best. Thanks for all the great posts!

Apr 18, Dividend-paying covered-call candidates

Sun, 18 Apr 2010 19:07:19 GMT

Check out this list of "undervalued" dividend-paying stocks that appears on the SeekingAlpha site. These may make good covered-call candidates. They are selected as undervalued by SeekingAlpha because they are within 20 of their 52-week lows. Of course, you will need to check these against your personal trading plan and see if they fit. One reason why I bring them to your attention is that with undervalued dividend payers you get three potential forms of profit when writing covered calls: capital appreciation, dividend income and option premium. Good trading to all!

Apr 16, A good example of a covered-call trading plan

Fri, 16 Apr 2010 01:14:53 GMT

The covered-call trading plan outlined in the "My Covered Call" blog is worthwhile to review. Although this has been published since 2006, it remains a good example of a plan for a covered-call and cash-secured put strategy. I'm including it here as an example for your consideration. This is not a recommendation, mainly because the plan might not fit your style or temperment. But it is a good example of one person's effort in constructing a safe-options-trading plan. As you review it look at all the points and assumptions that were considered. The objective and strategy is clearly spelled out. The details of exit plans for each trade is carefully considered. This is good reading.

Apr 15, Emotional Well-Being and Trading

Thu, 15 Apr 2010 00:25:21 GMT

As many of you know, I am a big fan of Dr. Brett Steenbarger and the TraderFeed Blog. Check out the link provided for some insight on the relationship between emotional well-being and trading success. According to Dr. Brett, there are four pillars to emotional health: Joy, Contentment, Energy and Affection. He says he's unaware of traders sustaining success if any of these are lacking. Read the article for some real insight. Then evaluate yourself ... and your trading.

Apr 10, Favorite Trading Books

Sat, 10 Apr 2010 18:33:52 GMT

Favorite trading books for your education and enjoyment

Apr 7, Good site for dividend stocks

Wed, 07 Apr 2010 01:23:31 GMT

The DividendInvestor.com is a great source of information about dividend-paying stocks. It should be of particular use to covered-call writers hoping to gain premium plus dividend income. They have a simple interface where you type in the stock ticker and you get lots of useful information including the ex-dividend date. It will be very helpful in selecting the right month call to write so you have the potential to capture the next dividend. Many thanks to the members of the Yahoo Group "Just Covered Calls" for bringing this site to my attention.

Apr 4, Options Trading Blogs

Sun, 04 Apr 2010 01:21:45 GMT

A review of some options trading blogs that champion safe options selling techniques

Apr 2, Stocks for dividend plus growth

Fri, 02 Apr 2010 13:02:39 GMT

As many of you know, writing covered calls on stock issues that pay good dividend and are growing can be a profitable strategy. If done successfully, you can profit in three ways: dividend income, capital growth and option premium. The folks at Seeking Alpha have provided a list with detailed discussions on eight apparently undervalued dividend-payers with good growth rates. Have a look at and enjoy this article.

Apr 2, The 24/7 Wall St. Twenty Best Financial Blogs

Fri, 02 Apr 2010 01:07:56 GMT

For those who enjoy reading the financial blogosphere, here is a list from 24/7 Wall Street that is sure to provide some good reading material. Some of the blogs are already reviewed on this website, but there are some new ones to consider. Thanks to Dr. Brett at TraderFeed Blog for posting this.

Mar 21, Tips for your Trading Plan

Sun, 21 Mar 2010 12:28:38 GMT

As emphasized on this website, having a trading plan is critical to good safe-options trading. Accordingly, I like to review the literature and blogosphere for ideas related to this topic. Have a look at "Time Tested Trading Rules" at the Trading-Plan.com website. Stuart McPhee succinctly reviews the essence of good trade planning in this short read.

Mar 20, Options Expiration

Sat, 20 Mar 2010 23:28:56 GMT

Yesterday was Options Expiration Friday. Many of you will have had covered calls or cash-secured puts that turned out to be profitable. Congratulations to all. Keep in mind that February and March have been kind markets for covered calls and put writes because we have been moving steadily upwards. So, what about new trades? Be cautious about new buy-writes in the near term. Although no one can predict the future, the market may be overbought according to some measures (such as stochastic and MACD histogram) Accordingly, it would be wise to consider your trading plan. What will you do if (and when) the market turns down? Do you have stop losses in place? Do you hold any protective puts? Will you wait for a pullback to enter new positions?

Mar 15, Barron's Survey of Brokers

Mon, 15 Mar 2010 00:02:50 GMT

Barrons has published their 2010 survey of brokers. This article has an extensive review of many of the brokers recommeded on this website, as well as some others for your consideration. Thanks to Jeff Partlow for providing the heads up about this survey via the Yahoo! Group "Just Covered Calls"

Mar 11, Online Options Trading Brokers

Thu, 11 Mar 2010 01:17:11 GMT

Information and Suggestions on Online Options Trading Brokers

Mar 10, Why planning trades is important.

Wed, 10 Mar 2010 12:22:28 GMT

As emphasized throughout this website, planning your safe-options-trading program is paramount to your success. At the TraderFeed Blog, Dr. Brett reviews why planning trades is important. His perspective as a trading coach, active trader, and trained psychologist brings super insight to this idea. You will benefit from reading this.

Mar 3, Some Dividend Paying Stock from SeekingAlpha

Wed, 03 Mar 2010 23:31:11 GMT

SeekingAlpha has highlighted 6 dividend-paying stocks that have recently increased their dividend payouts. They showcase CB, CTL, DCI, KMB, MO and PNY. These kinds of issues may make good candidates for covered calls. The idea is to capture dividend and premium income. Check the link provided for more information and please do your own due diligence before you trade.

Mar 2, IBD market view

Tue, 02 Mar 2010 12:05:42 GMT

Investor Business Daily (IBD) has shifted their stock market outlook from negative to positive following the Monday March 1 advance. As they stated "In a broad advance Monday, the Nasdaq marked a follow-through, shifting the market's outlook to a confirmed, if cautious, uptrend." This would be good news for covered call sellers and cash-secured put writers, who favor steady to uptrending markets, if their prediction holds. IBD is a respected voice in market calls and a great source for investing information. Subscribe to Investors Business Daily Digital Edition Get 4 Bonus Weeks!

Feb 26, More excellence from TraderFeed

Fri, 26 Feb 2010 01:35:13 GMT

Dr. Brett has crafted a beautiful essay on "Finding your niche in life and trading" in this Feb 25 post on his blog. Since safe option-selling techniques are a special niche of the overall market, his words really resonated with me. He says that "a niche is a domain of endeavor that not only captures our talents and skills, but also our deepest values and interests". He believes that "greatness" in your niche is "a manner of approaching life, not a trait that is simply present from birth". He sums it up by saying "By focusing on what we love doing and what we are doing well, we can discover who we are at our best. And who we are at our best is central to defining our niches in life". So keep up your passion and your focus: By crafting a great option trading plan, letting our winners run and exiting when our pre-planning tells us the trade isn't working, we can excel in the conservative option selling niche.

Feb 24, New Options Blog

Wed, 24 Feb 2010 12:22:51 GMT

I'd like to draw attention to a new options blog, Moneyrunner51. This is a blog started by a trader new to options. He has set out to document his trades and learnings regarding his forays into covered call and cash-secured put writing. I'm sure we'll learn from his posts.

Feb 22, Sample Trading Plan

Mon, 22 Feb 2010 02:02:43 GMT

A sample trading plan for your consideration