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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Uncle Frank who wrote (514)5/10/2001 4:17:39 PM
From: Andrew N. Cothran  Read Replies (2) of 5205
 
Here's another one for you.

On May 1, I sold 30 of the October 70's for 8.50. Today, I bought them back for 7.80. Net profit .70 times 3000 or $2100 less commissions, duration 12 trading days or $175 per day.This morning I sold 20 May 60's for 3.40 and bought them back this afternoon for 2.10. Net profit 1.30 times 2000 or $2600 less commissions, duration less than one trading day or $2600 for the less than one trading day.

So which was the better trade?

Moral. Better profits are in the short life options, not the longer lifes. So from now on I think I will stick to the nearest or the nearer term options. Time premiums expire more rapidly and one has a better feel for the relationship between stock price and option price.

Comments any one?
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