Covered Calls – Trade Analysis Checklist

Posted on February 11th, 2010 admin No Comments

I always go through my checklist before placing any trade. The checklist I have for covered calls is:

1. High Option Volatility

2. What month option to sell

3. What strike price to sell

4. If exercised what is my profit

5. What is the breakeven of the share purchase and option premium received


To receive ASX Option Recommendations or to learn more about The Covered Call or The Buy – Write Option Strategies please request the Covered Calls eBook by contacting us on 07 5504 2244 or info@totaloptions.com.au

Covered Calls – Monitoring Trades

Posted on February 11th, 2010 admin No Comments

The share price increases this is great for your trade and there are three things you can do:

1. Do Nothing

2. Roll out sold call for a small credit to avoid unwanted option exercise

3. Wait to be exercised and lock in profit

The share price falls there are a number of different things you can do with the covered call position:

1. Do Nothing

2. Close out of entire position sell shares and buy back sold call

3. Buy back sold call

  • This will be bought back at a lower price and therefore locking in a profit.

4. Protect Capital

  • Buy a put option to if you think the share price will continue to fall
  • This will reduce the risk of the trade significantly
  • More information on protecting shares from a fall can be requested.


To receive ASX Option Recommendations or to learn more about The Covered Call or The Buy – Write Option Strategies please request the Covered Calls eBook by contacting us on 07 5504 2244 or info@totaloptions.com.au

Covered Calls – Exercise Price

Posted on February 10th, 2010 admin No Comments

There are a number of factors to take into account when deciding which exercise price to sell the call option. Firstly determine what your breakeven is on the share. The breakeven is the purchase price less the entire option premium received. Make sure the strike price you select is above the breakeven price.


To learn more about The Covered Call or The Buy – Write Option Strategies please request the Covered Calls eBook by contacting us on 1300 368 316 or info@totaloptions.com.au