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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Tom K. who wrote (12098)12/24/1999 9:09:00 AM
From: Herm  Read Replies (1) of 14162
 
Thanks Tom! An interesting eye opener for me. It fits so well into the WINs approach as another piece to the puzzle.

1. From a time line perspective, selling naked PUTs when the BB, RSI, and OBV are rock bottom on a beaten down strong fundamentally sound company is a prefect entry into the stock. It does offer up front cash before a potential purchase either by pre-mediated intent or being PUT to.

2. Since, I prefer to write CCs at the RSI, BB, and OBV peaks rather than at normal (traditional book readings) lower levels, naked PUTs trades would not interfere with the CCing part of the WINs cycle. Perfect flip side income generating moves without factoring in any capital appreciation with long term hold stocks. It gives you something to do while you wait for the stock to appreciate.

3. It takes less work to apply either the PUT or CCs since you are following the stock trading patterns closely. Unlike jumping around from one stock to another. That can eat up quite a bit of time.

Tom! Is there anything dealing with tax losses or quirks. I would imagine if the same stock is PUT to you twice with the tax time span and PUT strike, that would be considered a wash sale? Are there any other traps?

I will have to add a new chapter to WINs from your info. It sounds like one would need a good size portfolio in order to take advantage of this type of investment strategy. What do you recommend as the least amount of working capital?

Thanks for your time!!!
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