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: Dave Pestle who wrote (11854)	11/24/1999 11:19:00 AM
From: David Lind	Read Replies (1) of 14162

Dave, like you, I have wondered why in the world someone would write a covered call on a stock that apparently has peaked (high RSI), and is likely to drop. Frankly, I am still wondering. However, it apparently was one of the founding principals of this thread. IMHO, it is a ridiculous concept. There are certainly more efficient ways to profit on a high RSI stock with a projected fall in price. The only logical reason to write a covered call is if you expect flat to slightly up performance. But locking yourself into a stock that you feel may drop is the craziest notion I have ever come across in 30 years of investing. The only person who is going to love this scheme is the broker who is handling your trades as your try to cover your ass on the way down.

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