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: Barbara Jo Nigh who wrote (11044)	6/16/1999 12:25:00 PM
From: jw	Read Replies (1) of 14162

Barbara, George and Herm answered much better than I could have. I sold some Dell calls few weeks back for 4¼ and was greedy and didn't use part of the premium to buy some OTM puts. Bought them back couple days ago for 1/8. Now had I bought some puts (side show) they would have increased in value plus the 41/8 that I made on the buy-back. Stocks do not have Options for all months. (most don't). Generally there are couple months (either back to back or they may be separated) IBM doesn't show Aug. & Sept. Dell doesn't show Sept.& Oct. Orcle doesn't show Aug. & Oct. Look at, quote.cboe.com, for IBM. Type in any symbol and see which months are absent. One way to generate income and be very,very conservative and hope to keep stock would to sell current month calls OTM expiry this Fri. Take IBM, June 130 at 1/16, no good, won't pay commish. June 125 @1/4 will give you $200 this Fri. Think it will be above that? Or July 130 @1 15/16, Oct.130 @7 3/8. Or look at the 135/140/145 strikes. Further OTM brings in less but maybe not as likely to be called. Hope I haven't made it too unclear. Happy trading, /jw

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