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: Michael Hart who wrote (7687)	6/18/1998 10:06:00 AM
From: R Sass	of 14162

I am not sure of your question. However, assume the following: Stock $35.00 40 Call $1.00 40 Put $6.00 If you buy the stock and sell the call, you have the same profit picture as if you had just sold the put. However, if you are a good trader and this is the lower end of the range (bollinger band etc.). It would be more profitable to buy the stock today, let the stock rally and sell the 40 call at a later date for more than 1 dollar. However, the risk is that the stock continues to break down, and you are not able to leg into the trade profitably. Ralph

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