How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Nigel_H who wrote (9968)	3/18/1999 12:50:00 PM
From: Herm	of 14162

Good question that is worth repeating. Some brokerages allow using LEAPs as the surrogate in place of that stock. That is a MAJOR advantage when writing CCs against that LEAP otherwise known as the term "calendar spread" to the option folks. Imagine, if you can afford to buy the stock for say $80/share x 100 = $8,000, you could easily afford three LEAPs (IF the stock trades LEAPs) for same $8,000 or less. That is usually the case. Thus, you control three times the value of stock and make three times more profit. Now, you last paragraph I no sure what you mean. You can sell a CC LEAP with a stock and you can write a CC against a LEAP at certain brokerages. CCers should access to both types of accounts. It's a smart idea anyway since ocassionally the phones are tied up. Hope that helps!

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