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: Douglas Webb who wrote (7727)	6/22/1998 4:37:00 PM
From: Herm	of 14162

Thanks Doug for your input on the spreads. What I'm worried about is investors/lurkers thinking that protecting a gapper is too difficult. I'm not crazy about covering CCs at a loss and rolling up strike prices myself. I've had too many burn me in the past. Most investors tend to wait, wait, wait, until the runaway CC is too expensive and the bull run has exhausted itself out before taking action. We also fail to keep an eye on the cause(s) for the run and worry about losing money. Selling (writing) the PUTs would bring in easy money. But, I hate to recommend it for fear of the poor soul that can't read charts and is not quick to pull the trigger without hesitation. We should list all three defensive moves and place a risk/reward comparison. Even between the recovery spread vs. bull spread I would rather try those two compared to simply covering the CCs at a loss.

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