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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: BDR who wrote (1185)6/23/2001 11:08:54 AM
From: rocklobster   of 5205
 
well actually, if you take this information, if 30% expire worthless and 10% are exercised and 60%are closed out prior to expiration, then it would follow that 75% of the options that make it to expiration expire worthless...

of the 40% that aren't closed out, 75% expire worthles.. the question for the astute then becomes, of the 60% that were closed out prior to expiration, was the value at closeout less than or more than the value at open. my guess is that in most cases it would be less.

I would venture to guess that the vast majority of the time, the time premium being written is profited on.
anyway, if simply playing the odds, by these numbers, writing options and holding through to expiration will have an average chance of expiring worthless of 75%

rok
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