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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: BDR who wrote (548)5/13/2001 2:44:34 PM
From: rocklobster   of 5205
 
Dale, thank you again for your comments.

I have been thinking of beginning my campaign by writing puts on stock I would like to own. Again my target would be an 8% compounded monthly gain, without using margin. It seems that with the price volatility, that this is a safer way to get into the original underlying stock position. If I write puts on stock that I would happily buy at today's price, than I bank the premium, and if the stock moves down, I get it cheaper and immediately write the calls. If the stock doesn't move down, than I just keep writing puts on stock I would like to own.

Seems like the best of both worlds. Of course I expect to have some bad months with any strategy. If this strategy actually succeeds at producing an average 8% compounded monthly return, than that will be a double in a years time after taxes. assuming that short term taxes will eat up a third of the 150% gain.

just some thoughts.

rok
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