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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: adairm who wrote (1074)	6/19/2001 2:35:02 AM
From: tradeyourstocks	of 5205

I heard you guys are expert option traders by now so I thought I'd come over and learn some new tricks.<g> I don't know if my reasoning is the same as Dr.ld's, but I also think that this is a market to sell puts vs calls. While calls have lost much of their premiums of late, puts have been priced up. My approach is to establish a way out of the money put-call spread for my stock holdings. For example, in the last 12 months I've sold Jan02 $40 puts on QCOM as well as $180-$220 calls for a total of about $15/sh. My goal is purely income oriented. The position is in a taxable account, so I'd rather not be called or assigned. (Actually, at $220 I'd be willing to let a few shares go. <g>) My approach takes patience and only requires a few trades per year. I wait for periods of extreme negativity to sell puts and periods of optimism to sell calls. Sure feels like it's time to sell some puts. MicroE

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