Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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From: Jerome	4/5/2007 7:27:37 AM
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Call out strategy....This idea here is to have about the same amount of risk from a position being called away as the new position you are entering. Example Halliburton closed at 32.84...if I accept a call out on the shares I own (not buying back the cc prior to expiration)then I would use the proceeds from the call out on another stock at a price between 31 and 32 and again immediately cover at the 32 1/2 strike. Ideally I would like to see each covered call position in my portfolio at about 6% of the total portfolio. This results in about 16 to 18 positions for a portfolio. There are always a few positions waiting for some modest appreciation. Like now I own some CSCO that I bought at 27, and used once for a covered call. I hope that CSCO gets back to 26.70 so that I can write the 27 1/2's and get some decent premium.

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