The Covered Calls for Dummies Thread Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Covered Calls for Dummies Thread

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Uncle Frank who wrote (831)	5/29/2001 2:34:37 PM
From: LKO	Read Replies (1) of 5205

Note that this was not a consensus opinion. A number of dissimilarities were noted, including the use of margin, which restricts selling puts in tax sheltered accounts. You are right. I probably brought that analogy in the wrong place. If I understand correctly comparison was more with a buy-write strategy where you have lots of dough (cash/margin)and were going to use it with first to buy the stock (for the sole purpose of being able to write CC) and then write CC on it. DITM (or maybe ITM) put in that case would require slightly larger cash/margin up front with similar results while leaving the cash/margin uncommitted to equity. It all depends ofcourse on the stocks trading patterns, but sometimes if I lose a stock I bet on a covered call, I can buy it back at same or lower by selling puts and getting assigned. Ofcourse there are tax and holding period and taxable vs tax-sheltered account considerations which apply to this context too.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next