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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Uncle Frank who wrote (973)	6/8/2001 2:33:22 PM
From: JohnM	of 5205

I reported my sale of sebl June 50's for $3.20 on Wednesday when the underlying was at 51. Today's dip offered a nice opportunity to unwind the position at $1.40, keeping most of the premium and clearing the decks to write the July series if we get a bounce. Frank, you are definitely a quick draw artist. I decided to copy your sale when you announced it a couple of days ago just to see what happened. Then, this morning got out just before I saw your post. Not because I knew anything but because I just saw a bit of money to take off the table. Kept saying to myself, as I did it, that I should stick around and get the rest of it by waiting until next Thursday or Friday to buy it back. Mine was not in your league either because I'm doing my version of paper trading--selling one or two contracts. Commissions are not small events there, though, particularly with Schwab (to keep my story clear, I should note I have another IRA rollover account that has much lower commissions). To illustrate: Sold one contract at $3.30, bought back at $1.50. Looks like I'm $180 ahead. However, the comms took $60. Two lessons. First, once I feel more comfortable try to find ccs that scale easily to lower the commission bite--means I need to write them on stocks in which I have a reasonable number of shares. Second, Frank's got good hunches (g). You did say you made your trades on hunches, right! John

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