Joe,
If you can buy a stock at 126 and sell it the next day at 144 each and every day, of course; you would not want to write call options.
But you won't be so lucky every time. In fact, if you knew that BRCM would jump 18 bucks today, you would have bought out of money calls on margin. The fact is, you or anyone else, do not know that the FED would do what they did. Even bond pros, guessed wrong today. Short-term EURO traders were slaughtered, losing 50 to 75bp in futures. That's $188K per 100 contracts, now that's a bad day! Not to be sidetracked, no one knows where a particular stock, or a certain sector will head on any given day. No stock goes up forever, look at the nets babies.
But I can tell you that over the long haul, and ever since they traded listed options at the exchanges. 90% of the time, people make money writing covered calls. If you're afraid of leaving money on the table, just be patient and wait for the down days (they will come) to buy your calls back.
Patsy |
