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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Dr. Id who wrote (1073)6/18/2001 4:57:42 PM
From: adairm  Read Replies (3) of 5205
 
Doctor: I know of your fondness of selling puts. But selling naked puts and selling covered calls are both bullish strategies.

Assuming that the writer really is writing for income and not to acquire stock, I'm not sure I quite follow your comment, "This is the market to sell puts, not calls."

Are you implying that you think the market will fall? If so, then selling calls, naked calls, is the most profitable strategy.

(I know this is a Covered Call thread, but I'm a dummy!)

If, however, the goal is to acquire stock at a lower price, as implied by your signoff moniker <<Dr.Id@nameyourpriceinthebargainbasement.com >>, then yes, selling the OTM put allows you get paid to buy stock below today's price.

However, neither naked puts nor covered calls is an effective strategy in a bear market. These strategies work best in flat to mildly bullish markets.

Adairm@learnedthatlessonthehardway.com
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