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| Acknowledgments | |
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| Preface | |
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| Introduction | |
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| Building the Foundation | |
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| Option Basics | |
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| What Are Options? | |
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| How Options Compare with Stock | |
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| Standardization | |
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| Listed versus Unlisted | |
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| Option Listings | |
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| Strike Price | |
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| Expiration | |
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| Players and Positions | |
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| Exercise and Assignment | |
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| The Basic Mechanics | |
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| What Happens at Expiration | |
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| Covered versus Naked | |
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| Options in Your Account | |
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| Recapping Option Basics | |
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| Just Beyond the Basics | |
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| Valuing Options | |
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| Fair, or Theoretical, Value | |
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| Volatility | |
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| Interest Rates | |
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| Dividends | |
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| Theory versus Reality | |
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| Trading Symbols | |
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| Adjustments | |
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| Expiration Months | |
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| How Options Are Traded | |
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| The Exchanges | |
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| Computerized Quotes | |
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| Liquidity | |
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| Recapping Just Beyond the Basics | |
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| Covered Writing Mechanics | |
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| Requirements for "Valid" Covered Writes | |
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| Risk/Reward of a Covered Write | |
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| Risk/Reward Characteristics Over Time | |
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| Risk Transference | |
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| Shorting a Call versus Shorting a Stock | |
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| More on Exercise and Assignment | |
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| Calculating Potential Returns | |
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| Return if Exercised (RIE) | |
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| Return Unchanged | |
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| Return Based on Net Debit | |
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| Executing the Strategy | |
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| Turning a Position into a Strategy | |
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| A New Way of Thinking | |
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| Follow-up Actions | |
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| The Simple Case: Doing Nothing until Expiration | |
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| Closing Part or All of the Position | |
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| Rolling Options | |
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| Rolling Up | |
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| Rolling Up and Out | |
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| Rolling Down | |
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| Rolling Out | |
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| Other Considerations | |
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| Covered Call Strategies | |
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| The Total Return, or "Buy-Write," Approach | |
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| The Incremental Approach | |
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| Hedging Individual Stocks | |
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| Reducing Risk in Small Portfolios | |
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| Writing Calls on "Hot" Stocks | |
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| Tax Deferral Strategies | |
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| The Benefits of Covered Writing | |
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| The Rationale Behind Covered Writing | |
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| Realistic Expectations | |
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| Call Writing and Stock Returns | |
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| Major Factors Affecting Call Writing Returns | |
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| Stock Selection | |
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| Strike Price | |
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| Expiration | |
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| Volatility | |
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| Interest Rates | |
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| Transaction Costs | |
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| Covered Writes Compared with Stocks Over Time | |
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| The Buy Write Index (BXM) | |
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| Real-World Results for Twenty Stocks | |
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| Results by Calendar Year | |
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| Effects of Writing a Higher Strike Price | |
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| Recapping Benefits | |
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| Intangible Benefits | |
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| What is Long Term, Anyway? | |
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| The Covered-Write Solution | |
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| The Benefits in Detail | |
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| Implementation | |
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| Deciding on Your Approach | |
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| Incremental Writing | |
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| Traps Involved in Writing for Incremental Return | |
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| The Total-Return Approach | |
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| Traps in the Total-Return Approach | |
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| Are You a Fundamentalist or a Technician? | |
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| Selecting Stock Positions | |
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| Searching All Stocks | |
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| Searching Specifically for Covered Writes | |
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| Selecting Calls to Write | |
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| Which Strike Price? | |
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| Which Expiration Month? | |
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| Getting Your Ducks in a Row with Your Brokerage | |
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| Full-Service versus Discount Brokers | |
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| Online Brokers | |
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| Financial Planners | |
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| Which Account to Use? | |
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| Writing Calls on Your Employer's Stock | |
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| Keeping Records | |
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| Placing Orders | |
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| Market and Limit Orders | |
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| Stop Orders | |
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| Buy-Write Orders | |
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| Using Spread Orders When Rolling | |
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| Risks | |
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| Basic Tax Rules for Options | |
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| Precepts for Covered Call Writers | |
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| Advanced Implementations | |
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| Covered Writing on Margin | |
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| Margin Rules for Covered Writes | |
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| Advantages of a Margined Covered Write | |
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| Covered Writing against Securities Other than Stock | |
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| Covered Writing on "Diamonds," "Qs," and Other ETFs | |
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| Writing Calls against Convertible Securities | |
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| Writing Calls against Other Options--The "Call-on-Call" Covered Write | |
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| Covered Writing on LEAPS | |
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| Partial Writing, Mixed Writing, and Ratio Writing | |
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| Partial Writing | |
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| Mixed Writing | |
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| Ratio Writing | |
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| Put Writing | |
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| Advantages of Put Writing | |
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| Disadvantages of Put Writing | |
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| Implied Volatility and Overvaluations | |
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| Efficiency, Inefficiency, and Overvaluation | |
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| Expiration Games | |
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| Option-Stock Arbitrage | |
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| Tools for Covered Writers | |
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| Option Chains | |
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| Search Tools | |
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| Calculators | |
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| Probability Analysis | |
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| Industrial Strength Option Software | |
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| What Will This Cost You? | |
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| Internet Resources for Covered Call Writers | |
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| Afterword | |
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| Timeline of Options Trading in the United States | |
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| Sample Covered Writing Spreadsheet for Tax Purposes | |
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| Tax Rules for "Qualified" Covered Call Options | |
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| Twenty-Stock Covered Call Study | |
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| Bibliography | |
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| Glossary | |
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| Index | |