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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: John Rountree who wrote (4114)8/25/1997 9:16:00 AM
From: Herm   of 14162
 
On the 15th of each month the short interest for the previous month is released. So, you can get an idea of the stocks being shorted. The percent of increase in short ratio, ex. 5%, 8% etc. for the month will clue you to possible good targets to watch. I've read that only 6 to 8% of investors ever work the downside short strategies of the stock market. When markets do fall, the tech stocks drop pretty fast and in hefty percentages. There is a FORTUNE to be made during those times. And, it should be part of the CC writers tool box. Your observation and comment about selling DEEP IN THE MONEY calls during down cycles is correct. Although, many investors allow their fear to take over. They panic and sell at a loss. If you are CCing, covering when prices drop, and doing what we explained in this forum, you should be making a profit! If you have a profit it would be easier to sell deep in the money calls and follow the stock down. By making money off the short strategies like buying PUTS and rolling down call selling, you would have the money to average down when the stock bottoms. Eventually, the stock will reverse and you will have a very nice low net cost basis to make a killing when the market comes back.
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