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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: hpeace who wrote (1845)4/24/1997 10:59:00 AM
From: David E. Haralson   of 14162
 
To Thread: Buy / Sell Stock vs. Buy / Sell Options

This is sure to cause a great flurry of responses, but
why not trade the stock instead of the options.

I have been following along since the beginning and I have paper traded and money traded. I have actual made some money. However, using my 20/20 hindsight (is there any other kind!!) I would have made more money sell the stock instead of the call and then buying the stock instead of closing the call position.

I have read most of McMillian and he mentions stock trade commisions being larger than the option commissions. For me this is not true. I can trade stock at $18/trade and options at $35/trade.

I understand I get time premium by selling out of the money calls but this is a small return. Most of the trades mentioned here have been near term in the money down strike calls. The calls move at 50% to 100% of the stock price and there is very little time premium. In this case I think(??) that selling the stock will also result in a larger return.

I know this will create a large response so for the benefit of my self and others trying to read this please think and keep the responses conciss, to the point and useful.

Thanks, this has been an enlightening and learning experience
David
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