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Strategies & Market Trends : Canadian Options

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To: william smith who wrote (409)5/6/1997 8:39:00 AM
From: kajtek   of 1599
 
Porter will give you better advice but if you don't mind to hear from nonprofessional, here it is. I created a spredsheet in Excel 97 for simulation of different strategies of covered calls. One is to reinvest profit. One is to always buy back if stock trades above strike at expiration to prevent being called, another scenario is to let to be called etc. Then there is a table that compares different scenarios and shows which one is better. It all depends how the stock will trade in the future. There is no one that is always better. I am sure you know that if the stock was going to drop again it would be better to be called and buy back the stock when it is low etc etc. In summary if you can predict future you will find best strategy but then you don't need to play covered calls at all.
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