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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Uncle Frank who wrote (899)	6/4/2001 12:08:49 PM
From: adairm	of 5205

If I hear what you're saying, the CC revenue is going into your IRA. I don't know if your taking money out of the IRA to live on, but you're trying to scalp a few points monthly by using market timing. You're just trading options rather than stocks. (Well, you are trying to take advantage of the time value decay of near term options, too.) The stress is coming from trying to maximize the return. Right? I'm trying to build a strategy to generate income to supplement my rental income. I haven't found a purely mechanical method, so I've had to do some soul searching to determine a strategy that I would be happy with, and not let the greed factor take over. That's why I lowered my expectation to a 2% monthly premium. If I can get that, I would be quite happy. 2% ain't exactly shabby. 2% on a $500,000 portfolio of stock would be $10,000 a month. Not to say that a higher return would be a bad thing!!! But, by lowering expectations I'm hoping to build a strategy where I can do other things rather than watch the real-time ticker constantly! Adairm

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