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: NateC who wrote (13660)	3/16/2001 6:46:28 AM
From: jaytee	Read Replies (3) of 14162

Hey, Nate: Yeah, it IS quiet. I'm like your idea of picking up a leap , and selling a call so close to the "midnight hour". Did you mean that you bought the Jan 03 30's? Because the 5.00 premium looks to have been the cost for the 30's yesterday, whereas the 20's sold for as high as 9.00 ea yesterday and only as low as 7 3/4. I must be missing something. Did you really sell the 20's calls? The stock opened 21 7/16 yesterday, and closed 20 5/16. That's guts! How do you feel about selling the 20's when you're already RIGHT THERE? Maybe I misunderstood. If you sold the 22.5's THEY sold for about 3/8, and MIGHT be less likely to call you out on the last day (than the 20's, with the underlying itself already over 20 1/4 at the end of the day) I was just wondering if I missed something, because the lowest that the 20 calls sold for was 11/16 (not 3/8) . So maybe it was a typo. In any event, if you sold the 20's, and the stock is ALREADY selling at 20 PLUS (the day before expiration), how do you play this? Meaning, how HIGH can the underlying go till you feel comfortable with NOT being called out? Are you playig a calculated risk on the stock further tanking? And are ready on the final day to pull the trigger if you are wrong? Do you know something that you can SHARE about your broker's policy on (how close the underlying has to be to the strike price you sold before they're) calling you out? And, if you're betting on it tanking further (today) on the last trading day before (Sat.) expiration . . . do you sit by your monitor for the day to watch? (waiting to buy it back) If you have to buy it back, can you usually do so on the LAST day for a significantly LOWER price (as time value leaks out like the sands in an hour glass) . . . pocketing the difference . . . and still make enough to outweight the COMMISSIONS? just trying to learn from you guys in the trenches any illumination would be appreciated! jaytee

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