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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: Mannie who wrote (32768)3/8/2001 7:29:18 PM
From: FR1  Read Replies (1) of 65232
 
Scott - I don't understand how you could make money during the last year with buy/write. Especially with msft, csco, emc, qcom. It seems to me that if you bought the stocks and wrote covered calls you would lose your shirt because the covered stock would drop like a rock and go down much further than your premium. You also would be obligated to hold the security unless you bought back the call.

It seems to me that the strategy might work in a downtrending market if you bought the stock, intended to hold it long, sold calls and bought protective puts. The calls would probably pay for the protective puts and you could ride the down elevator almost for free (or at least until expiration date).

How did you make money doing buy/write?
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