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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: FaultLine who wrote (1033)6/14/2001 6:52:42 AM
From: Pat W.  Read Replies (1) of 5205
 
I have a question regarding longer term CCs. I realize the rate of return is better writing shorter term CCs, but I have some smaller accounts that I do not have time to manage actively (my full time job interferes). I am thinking of writing some longer term options with low call prices (for relative safety) that could just sit. A couple of examples, based on yesterday's prices:

using QCOM at 54.22 on 6/13

1-sell jan'02 50 at 14.2
if exercised, annualized rate of return 46%

2-sell jan'02 40 at 19.9
if exercised, annualized rate of return 30%

3-sell jan'02 35 at 23.1
if exercised, annualized rate of return 22%

4-sell jan 03 40 at 25
if exercised, annualized rate of return 20%

Using SEBL:
sell jan 03 35 at 20
if exercised, annualized rate of return 23%

Comments/criticisms would be appreciated.
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