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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: BDR who wrote (201)	4/24/2001 2:19:52 PM
From: Uncle Frank	Read Replies (1) of 5205

>> For example, if you sold a LEAP call strike price 20 for $10 on a stock selling at 20, the ballpark return is 50% when the real return is 100%. Oh my, confused again. Buy ABC for 20/sh. Sell ABC 20 strike LEAP for 10/sh. Stock gets called at 20 At that point I'm holding 30/sh., which sure seems like a 50% return. Aren't you double counting if you use the $10 premium to reduce your cost basis, and then claim the same $10 as a return? duf

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