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: Night Writer who wrote (8924)	11/3/1998 7:59:00 AM
From: Herm	Read Replies (2) of 14162

Howdy, Looking at CPQ chart set in log scale the BB and RSI presents a nice looking reliable major pivot points. That kind of information and a trading rule reduces a great deal of guess work and stress for an investor. askresearch.com From time to time investors have commented that basically they like the use of the indicators and just want to buy low and sell high over and over again. In fact, they ask, "why CC in the first place?" They indicate they would "get out at the top and buy it back at the bottom." Well, you could do it that way. I suppose if you have a high confidence in the use of the BB and RSI you might as well sell at the upper BB tag and then short the stock back down until it tags the lower BB and cover your short position(s). That would make the waiting worth while and very profitable! You can make money on the way up and on the way down. Otherwise, CCing with this approach on the upper BB tags offers a great deal of downside protection. It is VERY CONSERVATIVE when it comes to investing in stocks. That is the MAJOR difference for those that want to remain long on the stock during good times and bad. Playing the DOW DOGs that way would be idea for a retired person. It is what I may someday be doing myself. 30% to 40% annually without losing sleep is what I would call a nice retirement income. Young bucks need to see 40% to 60% or they get bored. I can create a PowerPoint presentation for each investment style in the future. It gets confusing at time. Some trading instruments (options) are clearly not suitable for all investors. They don't have a good enough working knowledge, they hesitate to act, or they are not disciplined to stomach the volatility at times.

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