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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Delfino R Zavala who wrote (3114)	12/10/2001 12:16:30 AM
From: Uncle Frank	Read Replies (1) of 5205

>> My question is how do you decide which option to sell... is it just a personal preference on the amount of risk you want to take in getting the stock called? It depends on your objective. Some use covered calls to generate an income stream from a highly appreciated core holding without risking triggering a taxable event, and gravitate towards "safe" out-of-the-money strike prices. Others use it to reduce their cost of ownership on new positions (the buy-write strategy) and prefer at-the-money strikes. And then there are those who write in-the-money cc's as a hedge when they feel the prices on their holdings have topped out. >> I am toying with the idea of selling a bunch of calls and or leaps on my portfolio... If you tell us why you have become interested in cc's just now, some of our smarter dummies may be able to offer useful insights. duf

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