Put and Call Option Secrets

The Covered Call Strategy is composed by a long position in a stock or ETF (In this example: Exxon Mobil Cp.) and short one in a call option (Choose one from the Exxon Mobil Cp. Options Chain) in the same stock or ETF. The strategy is often called a “buy-write” strategy.

 The option seller will receive the premium paid by the option buyer, and if the stock price remains stable or increases the writer will be able to keep this income as a profit but if the stocks price decline more than the premium, the net position will likely lose money.

In the next table you will find some important indicators for this simple strategy.

CovCallRate: Time Value / (Stock Price – Option Premium) x 365 / Time to Expiation

Cov: The change in the stock price to start loosing money with this strategy. Premium / Stock Price

Find a Covered Call Rank in www.optionstradedata.com

Date Year Month Stock Last Stock Strike Symbol AveB-A CovCallRate Cov. IV 07-24-09 2009 8 XOM 72.29 60 XOMHL 12.38 2% 17% 36% 07-24-09 2009 8 XOM 72.29 65 XOMHM 7.45 3% 10% 26% 07-24-09 2009 8 XOM 72.29 70 XOMHN 3.10 15% 4% 22% 07-24-09 2009 8 XOM 72.29 75 XOMHO 0.62 11% 1% 20% 07-24-09 2009 8 XOM 72.29 80 XOMHP 0.08 1% 0% 21% 07-24-09 2009 9 XOM 72.29 65 XOMIM 7.70 4% 11% 23% 07-24-09 2009 9 XOM 72.29 70 XOMIN 3.75 14% 5% 22% 07-24-09 2009 9 XOM 72.29 75 XOMIO 1.23 11% 2% 20% 07-24-09 2009 9 XOM 72.29 80 XOMIP 0.25 2% 0% 19% 07-24-09 2009 10 XOM 72.29 65 XOMJM 8.13 6% 11% 24% 07-24-09 2009 10 XOM 72.29 70 XOMJN 4.47 14% 6% 23% 07-24-09 2009 10 XOM 72.29 75 XOMJO 1.94 12% 3% 22% 07-24-09 2009 10 XOM 72.29 80 XOMJP 0.63 4% 1% 21% 07-24-09 2009 10 XOM 72.29 85 XOMJQ 0.16 1% 0% 20% 07-24-09 2010 1 XOM 72.29 70 XOMAN 6.00 12% 8% 24% 07-24-09 2010 1 XOM 72.29 75 XOMAO 3.47 11% 5% 23% 07-24-09 2010 1 XOM 72.29 80 XOMAP 1.82 5% 3% 22% 07-24-09 2010 1 XOM 72.29 85 XOMAQ 0.86 2% 1% 22% 07-24-09 2010 1 XOM 72.29 90 XOMAR 0.38 1% 1% 21% 07-24-09 2010 1 XOM 72.29 105 XOMAA 0.05 0% 0% 23% 07-24-09 2011 1 XOM 72.29 55 ODUAK 18.95 2% 26% 20% 07-24-09 2011 1 XOM 72.29 70 ODUAN 9.68 8% 13% 23% 07-24-09 2011 1 XOM 72.29 80 ODUAP 5.48 5% 8% 23% 07-24-09 2011 1 XOM 72.29 85 ODUAQ 3.95 4% 5% 22% 07-24-09 2011 1 XOM 72.29 100 ODUAT 1.27 1% 2% 21% 07-24-09 2011 1 XOM 72.29 110 ODUAB 0.52 0% 1% 21% 07-24-09 2011 1 XOM 72.29 145 ODUAW 0.06 0% 0% 23%