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 (11970)	12/2/1999 9:44:00 AM
From: Dave	Read Replies (1) of 14162

Herm- Thanx for the info on the Excel spreadsheet. Downloaded it and am currently learning my way around it. Wonder if you would'nt mind critiquing a rookies first foray into covered calls. Bought 300 TYC a couple of weeks ago @ 43.5 net cost basis incl. comms. Sound company I felt had been beaten down without reason and some price appreciation looked to be in order. Found your thread and wrote 3 Jan 50 calls @ 1 15/16. Took in $546 net of some other dude's money.Adj. Net cost now 41.68 Stock fell, and I covered @ 3/4.( using SOD money :-)Adj. net now 42.43 YeeHaw! My first Dippity Do! Sold 3 Jan 42 1/2's, took in $726 of SOD $.Net cost basis now 40.01. Stock has since fallen to 39 7/8 yesterday. My initial reaction was to buy some protective calls myself with SOD's $, but after practicing some PATIENCE, thought I might wait to see if price drops more, what with jobs report tomorrow. How am I doin'? Question: Re: "covering call when 80% of the premium still remains" Does this mean that you'll only allow the value of the premmie you rec'd. to go down by 20%? b4 you buy the call back? i.e. you receive 1.00 premmie for Jan 45 call you sell and due to stock depreciation your call buyers call goes down .20 and you buy back? Thanx in advance for your reply Dave

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