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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Delfino R Zavala who wrote (3114)12/9/2001 1:00:49 PM
From: Dan Duchardt   of 5205
 
Delfino,

When and what to write for a "portfolio" cannot be best determined in the abstract. If the portfolio is diverse, and if you are free to write naked index options you might do better that way than writing options on specific stocks. If your accounts are tax deferred, and you can only CC against you holdings, then you are limited to that strategy.

There is a huge time difference between Jun 2002 and Jan 2004. Whether either of those makes sense depends on your assessment of how your holdings are likely to perform over the lifetime of the options, and how much intervening management you intend to do.

I hope you don't take this as being evasive, but I don't think anyone can answer give you a concise answer to your broad question. Books have been written on this stuff, and yes there are some models that can help you decide what to do, depending on your assumptions about where the market may be going. The one I use is Excel based, and is available free at hoadley.net.

Dan
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