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: Dan Duchardt who wrote (13501)	1/23/2001 11:25:17 PM
From: JGoren	Read Replies (1) of 14162

Forgive me for some very pedestrian questions. I went to the site with the calculator. I really don't know what the significance of the numbers is. For example, this is what I got on a current Amgen call. Amgen Historical Volatility: 10-Day 1-Month 2-Month 3-Month 97.31 87.94 73.67 63.17 Feb. 2001 CALL at 75 strike ImpliedVolatility 50.51 Market Price 1.1875 Calculated Price 3.4904 What does higher historical volatility mean, as you go to 100? What is the meaning of implied volatility; how do you read the figure. What is the significance of the calculated price? And, most particularly, if you have sold a covered call and the price has moved more than you thought so you are at risk that it could get called, what do you look for in these calculations? Appreciate any help you can give?

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