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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: William who wrote (968)	6/7/2001 9:31:46 PM
From: hivemind	of 5205

On the stock price level for writings calls against, I've seen references to lower priced stocks being "better" -- simply because there is an apparent higher proportionate premium level. The idea being if all things are equal except stock price, one might could get say 10% on a $10 stock ATM call as opposed to say, 7% on a $20 stock. So where your capital commitment is the same, one could possibly earn more from the lower priced stock. I have never looked into this myself, I report only what I've read. Myself, I don't care what price level when doing a buy-write or equivalent short put. I consider return on strike over time, but only after fundamentals are checked out satisfactorily and the stock is not too pricey. caveat emptor

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