Exit Covered Calls Early with Gain? Normally with a covered call trade, we are not looking to exit early, especially if the stock has gained value.  Under most circumstances, the cost of buying back the option will offset the premium received, plus any potential gain in selling the stock.  You usually are better off letting your stock be called out.  Even if you are really bullish on the stock, most cases would work out better by having your stock called out and then buying back the shares at a higher […]

Trade Entries Tonight we talked about some of my option trade entries on different stocks. One of the more common themes for a trade entry was illustrated by a trade into Southwest Airlines, symbol LUV. You can refer to a snapshot of the chart below from StockCharts.com. The setup of the chart is using 3 commonly used indicators with their default parameters. The indicators are the RSI, MACD, and Slow Stochastics. Three simple moving averages are used: the 50 (blue line), 20 (red line), and 7 (green line). I am […]