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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: axp who wrote (14434)1/21/2001 9:36:09 AM
From: OldAIMGuy  Read Replies (1) of 18928
 
Hi axp, Another strategy I use in a rising market is, once I've satisfied my basic cash reserve requirements, I start to sell CALL contracts on a short time horizon for the same number of shares that AIM would have me sell. For instance, if AIM's saying I should sell my next 100 shares at $30/share and there's a contract for $1.50 out a month or two in the future, I'll sell that CALL and wait to see if it is fulfilled. (remember that I only do this when my cash reserves are topped up)

This extra "harvest" of dollars is nice when the price still rises and your contract is fulfilled. It's also not bad when the contract expires unexecuted as the premium you've been paid is pure fun money.

Best regards, Tom
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