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: tuck who wrote (11271)	7/21/1999 1:09:00 PM
From: David Wright	Read Replies (1) of 14162

Tuck, Not to butt in here, but I think it is important to distinguish between "insurance" puts, where you go for cheap OTM puts to simply protect your backside against bad news, and sideshow puts, where you are riding the TA indicators. For true sideshows, I would only do ITM's, near term. They move well with the stock, and have some volume, so you are closer to fair market value with them. The OTMs are not consistently at market, because nobody is trading them. With OTMs, I always run an option calculator, and pick my own price, just to see if the MM will wake up and respond with a real Bid/Ask. Dave

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