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: Jonathan Thomas who wrote (12048)	12/10/1999 5:12:00 PM
From: Herm	Read Replies (1) of 14162

Hello Ryan, Your questions are covered fairly well in the WINs presentation. And, I have anwered this good question over and over again. 1. Yes, you see the value of going out three months over only one month. Major drawback? You have a VERY short fuse and you have to watch your position like a hawk. That's why I say, unless you have the time, don't do it! 2. Runaways and gappers? Well, a keen eye on the charts and a high RSI and OBV will put you most of the time (8 out of 10 times) in a good position. The only way you are getting called out so much is A)you are picking viper stocks. B)you are pulling the trigger too soon (selling CCs) or you are picking a two time span like two or three weeks out. 3. I have repeated myself over and over! I like to go with long sideshow calls when a stock occassionally gaps. Recent example. IFMX and ITDS (DOX). I still own them and I continue to milk them up and down even while I wait for the Feb. exp. date and both CCs are in the money right now. You folks worry too much about being called out! I rather do sideshows on a stock I have a better feel than move onto another stock which may be an unknown. Patience and a close eye is the name of the game. I don't know Ryan! I feel I always have the odds in my favor. Even when I'm occassionally called out I still make a pretty profit. When a stock reaches you CC strike plus the cost = B.E. you need to act RIGHT THERE AND THEN. You can't sleep on it and hope the stock will peter out. You jump into defensive mode and implement damage control. Either cover or go with the long sideshows. One final point. Sideshow ITM PUTs are good when the stock is ready to reverse and pull back. That will occur less often than the moves up if you pick and enter into a stock correctly. Have you noticed I tend to pick beaten up stock most of the time? That is no accident! That happens to be my investment style. If you move into vipers the response time is very short and you must have the confidence to stay with the WINs system. Modify it, and you are into uncharted waters. But, we do learn from other people's mistakes. :-)

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