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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Uncle Frank who wrote (1274)6/30/2001 11:29:44 AM
From: BDR   of 5205
 
<< That is simply incredible, Alan, and a tribute to your careful planning and patience.>>

And, furthermore, is an excellent example of adapting option strategies to meet one's individual circumstances. Given the numbers of contracts he is writing, Alan recognized that more frequent trading (e.g. monthly) for smaller premiums (albeit higher premiums on a per month basis) would result in commissions eating up much more of his profits. Writing contracts three or four months out resulted in a greater percentage of the trade ending up in his pocket and less for the broker. As it is, commissions amounted to about 6% of his profits if I use Fidelity's commission schedule for online trades. I am so used to commissions on stock transactions of a fraction of a percent that I still get a shock when I realize what I am paying for options.
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