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: Amit Raj who wrote (11425)	8/25/1999 9:07:00 PM
From: Herm	Read Replies (1) of 14162

Lenght of time for the PUTs? A great deal depends on the float turnover (TRO). How many days does it take to turnover the entire float. Divide the average shares traded in say the last four weeks and divide into the number of shares in the float. That will give you the number of days it takes. Viper stocks will typically have 10 to 30 days TROs. While conservative stocks may have 120 to 140 days. So, if the stock moves fast from upper to lower BB, the charts will show you the range it could travel. Thus, the PUTs are only worth while for the downward length of time for that cycle. The longer the time for the PUTs, the more time value that will remain in the price. Thus, you would get a bigger payoff when cashed out. You are better off to have more time then less. :-)

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