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: Clean who wrote (7580)	6/10/1998 9:47:00 PM
From: Caroline	Read Replies (1) of 14162

At JUL expiration: - DELL is at 90: Keep the $400 credit. Sell your $85 stock for $90 (9 point profit at $90) The first $400 is the credit you keep. The next $500 is the difference between buying DELL @ 85 and selling it at 90. It's not that straightforward, I admit. If you are literally buying DELL at 85 and selling it at 90, you receive a 9 point total profit. Since you're dealing with options prices, you are really trading time and volatility. So your mileage may vary. Hope that made sense, just ask if it's still mud. Regards

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