The Covered Calls for Dummies Thread Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Covered Calls for Dummies Thread

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: FaultLine who started this subject	4/21/2001 11:51:36 AM
From: BDR	Read Replies (2) of 5205

I was looking at some longer term plays and the yields. I came up with some numbers that I thought were interesting and worth sharing. To begin with, here are my assumptions: 1) Bought 1000 shares of each security listed at the closing price 4/20, commission $14.95 (Fidelity). 2) Sold at the closing bid price on 4/20 10 Jan. '01 LEAPS Calls for the first in the money strike price below the purchase price of the equity, commission $37.50. 3) Yield calculated assuming the stock price is above the strike price in Jan '03 and gets called away. optionstrategist.com For example, I bought 1000 NTAP at 23.55 and sold the Jan '02 20 Calls at 9.80. Stock..........LEAPS..........Yield CSCO...........WCYAW........27.6% GLW............WGUAT.........32% JDSU...........YDIAE...........35.2% NTAP..........YYEAD...........44.8% QCOM..........WBIAL..........32.8% SEBL...........YDSAI...........36.4% Unweighted average of the yields = 34.8% In other words, a 35% return in a flat or up market, protection against about a 25% decline in the market and no decisions to be made again for nine months. Just one approach. Comments? Anyone have another stock with a better yield to offer?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next