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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Mark Pritikin who wrote (3593)2/23/1998 12:06:00 PM
From: Trebor   of 42834
 
>Of course, the risk to this strategy is that you sell covered calls and the price continues moving up and your stock is called away and your out forever!<

I've never had a stock called away unexpectedly that I wanted to keep. I know it can happen, but it's never happened to me. If the stock runs up and you want to keep it, you can usually wait until right before the option expiration date (when the time value is almost gone), buy back your calls and sell them further out at a higher strike price. The exception is if a stock just takes off for the moon; then you are right, it's going to be difficult, if not impossible, to fully participate in the stock's appreciation. But my experience is that's the exception, not the rule.
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