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: Herm who wrote (11851)	11/18/1999 5:12:00 PM
From: Alastair McIntosh	Read Replies (1) of 14162

Herm, I have a question about the covered call calculator. I downloaded the demo version for quick look. You seem to calculate the ROI on the cost of the stock, not on the net cost of the investment and are therefore understating the ROI. For example, a purchase of stock for $10.00 with a $10.00 strike with an option price of $2.00 shows a ROI of 20%. Based on a net cost of $8.00 for the buy-write the ROI should be 25%. Comments? Al

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