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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 (11878)	11/23/1999 5:32:00 PM
From: jaytee	Read Replies (1) of 14162

Herm: Thanks for the clarification. Do you only "charge" yourself 1% interest as part of the repayment of the loan? Assuming you give yourself a loan at that rate, why, may I ask does it take a 40 to 60% ROI to make it work? Sorry if I'm slow, just not getting it. Is the money that you are loaning yourself TAXABLE ? Thus you have to make more than a given tax rate, let's say 28% , for example, plus the interest rate? Or is it that you are also deducting for the TIME VALUE OF MONEY (lost opportunity . . . the money in the 401k could have been making 20% AND not taxed (for the moment) had you not "loaned" it to yourself @ 1%? Thanks Herm for your patience, and I hope you can help me clear this up so that I might grasp it enough to approach my tax attorney with the right questions, to further investigate if it is "for me" or not. I know you are not promoting this for anyone else to do, but that you are just sharing your insights (generousity) as always. Thanks, I'll wait for your response. jaytee

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