Dear Andrew,
I enjoyed reading your post about covered calls and your comment that "IMO, you are better off avoiding".
I have been writing covered calls on INTC since I bought the stock last June/July. As the stock price moved up, I have bought back the options and sold further out, at a higher strike price. Yesterday, I bought back the Jan 105's for $10 more than I sold(wrote) them. My stock cost was about $72 giving me about a $50 profit on todays close. However, my "buy backs" on the covered calls have cost me $25.50, a little over half of the upward gain.
So, in this case I would agree with your comment-however, so I and others here, can add to our understanding, perhaps you can explain a bit more. I read that call writing, as I have described above, is a "bullish" ploy. True?-IYO. Also is there a situation when you would recommend it?
I appreciate any insights-sincerely.
Just to add, that this is my first post, but I have been reading the posts of others such as yourself, Paul, etc., and want to express my sincere thanks to all for sharing and helping me become a much more informed and savvy investor. Hasn't hurt my profit margins either:)
Thanks again
Ray Smith |
