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: CCWriter who wrote (1345)	3/19/1997 7:50:00 AM
From: Herman J. Matos	of 14162

I don't know what I mean anymore..... Some readers wanted percentages of call outs. It is not a fixed number you can pull out of a hat. And, it would vary from month to month, year to year. Even if you are in the money, there is a chance that you may not be called out because your brokerage determines who is the unlucky person. That process of selecting varies from one brokerage to another. You need to ask what method they use. Ex. first in, first out, or random "spin the bottle." If you brokerage is told by the option clearing house that 10 contracts worth of ABC stock are to be surrendered and there exist over 30 ABC contracts at that brokerage, who gets called out? That's my point, there are no absolutes! Perhaps, that is why my TECD contracts that were in the money by 6 solid points BEFORE THE EXPIRATION DATE and were never called. That blew me away! I fully expected to be called away! It did not matter because I still had a lower net cost basis. It just added more profit gravy. It was a windfall.

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