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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: FaultLine who wrote (1)4/19/2001 1:26:51 AM
From: J F Allen   of 5205
 
I am basically a LTB&H investor in G&K stocks (if you ignore occasional gambling on market over reactions)who has been writing covered calls primarily in my IRA accounts.

If you read McMillan (Options as a Strategic Investment -required for any options user) He will tell you clearly not to try to recover from calls that are deep in the money.

I let them be called, then re-evaluate whether I have to own the called stock. If I do, I re-buy as much as I have to own and do a buy write. This does enforce a discipline in that on rapidly rising stocks I am forced to make constant valuation reasonableness decisions.
For ease of management I only write out of the money calls in the front month.

I felt bad last year when I lost some of my QCOM but not for too long.
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