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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 (12256)1/26/2000 11:12:00 AM
From: PeterCS  Read Replies (3) of 14162
 
Herm,

I read in the book LEAPS that Roth talks about using leaps to cc. He would use the leap as the call against the stock. Now I realize the premiums are higher, but will not the long time remaining prevent the leap from moving as much as a shorter term call? In a case where one sets up the position and say in a few days or a few weeks the stock moves up will the leap move as fast as the short term call?
The way I see it the the leap will not move as much as the short term call will.I can see it if one is going to hold the position for about a year, but that may be through a number of cycles and we would prefer to get in and out on each cycle. I also see the value of the leap to give one a lot of time if one is wrong on the position,but I am talking about short term moves.
Anyone can answer and thanks.
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