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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Aries who wrote (1189)3/16/1997 7:53:00 PM
From: Herman J. Matos   of 14162
 
1. Before the covered calls my nut was $9,294.95 for 400 shares or $23.24 net cost basis.

2. I received for the 4 covered calls April 25s $958 premium net w/comm . So, with the covered calls my nut was reduced to $8,336.95 for 400 shares or $20.84 net cost basis.

3. For upside enhancement (with the buyer's premiums) I picked up 4 March 27 1/2 calls for $417 w/comm. So, my net adjusted nut is $8,753.95 for 400 shares or $21.88 net cost basis. The four calls I will sell either late Monday or Tuesday morning into the rush!

4. For downside protection I went long and purchased the April 25 PUTS for $242. Again, with the call buyer's premium so my net adjusted nut is $8,995.95 for 400.00 shares or $22.49.

That's pretty much it! I make money if it moves up, down, or sideways! In fact, if I had the time I could of milked a few more bucks here and there. With the stock price at $28 my current profit is $2,204.05 or 24.50% straight ( 49% on margin which is my situation) or $5.51 profit per share without the extra calls or the puts so far! Man, I have not even broken a sweat yet. Sure beats working for a living.

Just use that Excel template to do all your number crunching. Like they told Luke Skywalker in Star Wars:

"May the force be with you!" In like manner, may the template be your force!
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