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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: BDR who wrote (821)5/30/2001 2:16:15 AM
From: BDR  Read Replies (2) of 5205
 
More on volatility and implications for calls:

The authors of the following article suggest that VIX can be used to time buy and sell decisions. If one uses either VIX (for the general market) or VIN(for the NASDAQ) to gauge the market, peaks in either (which represent peaks in pessimism and would also translate into peaks in premiums) are times to buy the stock and, maybe, not sell calls. Valleys (which represent optimism about the market and lows for premiums) are the best times to sell stocks (or calls, my interpretation, not the authors). So, just when you decide that the premiums don't make it worth writing calls may be exactly the time you want to be writing calls. Counterintuitive. Comments?

"Make volatility and uncertainty your friend" (written nearly a month ago)
moneycentral.msn.com
(from Didi's "Notes" thread, Message 15868984 )
Chart of VXN:
stockcharts.com
Chart of VIX
stockcharts.com
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