How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: JimmyC who wrote (7169)	3/25/1998 11:56:00 PM
From: EJ	of 14162

Jimmy, Just a thought on "repair"... and your question of whether you should try to make some money back in another position. I don't think it's necessary to be focused on showing that you made money on each stock that you started writing calls on. If you have a position that went south, the question simply becomes what trade is out there that will produce the return you're trying to achieve. Consistently writing a call on a stock that is has declined significantly in price may only allow you to recover a few percentage points off your investment (eg, $1 on a $40 stock). This may continue for many months. When, on the other hand you could have taken the same amount of capital and moved on to a better performing (hopefully) stock and received better premiums, etc... You can waste several months grinding out a few bucks on a dog. It's the decisions that make it interesting, isn't it? EJA

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