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: Joseph Ziebarth who wrote (682)	3/12/1997 11:18:00 PM
From: hpeace	of 14162

JOe, this article has some serios flaws. The comment about market professionals means that some studies have shown that to just own the stk and then sell the call without buying it back on retreats or repairs is a break even game. SO..THE REAL OPTION PLAYER DOESN'T DO THAT. IT'S STUPID TO just sell a call for 3.5 and if it falls to 1/2 not to buy back if there is time left to sell it again while it goes up again. plus, what really works against options players is no patience, too greedy, the don't do follow up actions,or they love their stk so much that they just can't buy a cheap put on it when you know that an announcement could go against you. If you think a oct '87 is coming then a cc is not a strategy for that kind of a fall. it's a suicide ride....you will not have a bed to have one of those sleepnless nights they talk about<g> A more realistic scenario is you know when earnings are coming out. If you think that you have something to be concerned about then keep stk and try to sell the cc on rally and buy the down strike call put. then during the cycle if you get retreat buy the upstrike call. The order of this can be reversed. This gives you a strangle you got chaep. not simultaneously. plus you keep a solid sok and write call money too. If you do this then you win big time if it has 2.5 strikes and it crashes on the announcement. The article also has the same old dribble about you lose if the stk goes up. this is nonsensee. if you sell the 25 call for 3.5 do some planning and before you do that buy the 27.5 call for 3/8.... you can do this. there are some that did this on ROST this week. alittle retreat and it's done and now look at ROST. ROSt retreat on tues. and wed AM. IT WAS RIGHT ABOUT THIS LINE..... KNOW YOUR STOCK INSIDE AND OUT. wRONG ABOUT THE SLEEPLES NITES. IF YOU HAVE SLEEPLESS NIGHTS THEN OPTIONS ISN'T FOR YOU. Buy a good stock like cpq and keep putting it in vault and don't even look at price. Or send your monthly money to a mutual..prudedunt specualtor fund<g> I've never herd of such bunk as this spread issue. Who cares about a 3/8's spread if I make $100,000 a month. I don't care if they make a 1/2 spread. This is junko. There's actually more myth in this article than truth although they are right again about their last paragraph. "not something you blindly enter into. the last paragraph is absolute truth.

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