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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: marcos1 who wrote (914)6/6/2001 8:57:16 PM
From: hivemind   of 5205
 
Therefore, I believe, (or should I say that the market has taught me) that fundamentals come first.

100% agree with adairm.

One would want to consider a group of stocks whose fundamentals are sound enough for purchase as first criteria. Then, after careful consideration of why implied volatilities may be higher in some of these, might the call premium be considered when making a buy-write decision.

In my own past experience, I'd put on buy-write positions, accepting extremely high premiums on stocks I had no business buying. The subsequent tanking of these issues taught me (and no doubt many others) that super-high premiums alone, without careful consideration of fundamentals is a trap.
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