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: hpeace who wrote (1286)	3/18/1997 6:02:00 PM
From: Don Lloyd	of 14162

Steve, ROST, <pull back to 25 by Friday> . I agree with you completely. Just an observation. - The trouble with short covered options is that while their intrinsic value declines with the stock point for point as the stock retreats towards the strike price, their time value actually increases. In the case of the APR25 calls, they should still be worth about 1.5 if the stock is 25 on Friday. This is using yesterday's implied volatility of about 54%. Herman - If you can keep your in the money short calls from being assigned at expiration, why bother with covered calls? <g> Regards, Don

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