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Technology Stocks : JDS Uniphase (JDSU)
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To: Gerald Walls who wrote (8022)3/27/2000 5:27:00 PM
From: t2  Read Replies (2) of 24042
 
Gerald, Covered calls are not bad if you sell them on volatile stocks that you plan to unload in the near term. If you select out of the money, I can understand why it is a bad bet. Actually I have made a lot money buying out of the money calls that someone had sold to me possibly to cover their position.<g>

If a stock trading at 120 and i sell a short expiration covered call with a 100 strike price and take in 30, it may not be that bad of a trade. Again, they are good if your intention is to unload the shares anyways. If the stock drops to 90, you have still not lost anything.
Of course if it were to take off to 220, too bad.

I am selective in the kinds of stocks I would sell covered calls. In many cases, it is better to buy puts to hedge--especially with a high flier.
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