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: CCWriter who wrote (168)	2/16/1997 6:58:00 AM
From: Herman J. Matos	of 14162

Thanks Blaine for your for your contribution and time. It does not hurt to review CANSLIM over again from time to time. The only point in O'Neil's book that I don't quite agree with is his perspective that covered call writing is not worth it! As he puts it, the small premium vs. the larger potential stock gain is not worth it. Hummmm, little premiums? He has never heard of the COVERED CALL BANDITS! I tell you, those $100, $150, and $200 dollar premiums each month add up REAL FAST! I can't begin to tell you what a charge I get when I sell USRX $1,200 covered calls alone. What O'Neil does not factor into covered calls is the compound magic of lowering YOUR NET COST BASIS by using margin to help you premiums buy more stock which inturn allows you to sell more calls. . As long as you can keep getting those premiums each month and reinvest back into your stocks to keep your net cost basis lower than the prevailing stock price, you will continue to make more and more money even when the stock market is GOING NO WHERE! Sideway stock movements in the markets is generally 60% of the time. Major up tick movements come in spurts when you least expect them! Rather, I should say they come after mini nosedives that scare you out of your position. It never fails, you hold onto that stock for EVER and the price goes nowhere. Then the sucker drops, zig & zag and you finally say, "I've had it! I can't take this no more! And, you sell at a loss and two weeks later the stock rebounds 8 points!

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