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: NateC who wrote (11323)	8/1/1999 11:47:00 PM
From: Hectorite	Read Replies (1) of 14162

Someone said that if your broker doesn't let you sell naked puts,many of them WILL allow you to do bull put credit spreads You're right Nate, and they usually don't care how wide the spread is, just so they can see your risk is capped and that exposure is within your ability to pay. If you sold ATM at 50 and bought OTM at 35, which would probably be almost free, you technically have a spread, but in a strategic sense, it is really a naked put all the way. Maybe I can bring us back to CCs. McMillan considers naked puts to equivalent to CCs, in fact he considers them to be a superior options strategy for the investor that is attracted to and comfortable with CCs, provided you don't already own the stock. I see what he means, I think...the risk/reward characteristics are the same and the capital requirements are less. It seems like one could play the WINS games, just inverted, on a stock you like using naked puts. When and if you are assigned, switch over to calls and keep playing. (sorry if y'all have already been down this road, I didn't look back very far...) H.

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