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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Dan Duchardt who wrote (1229)	6/27/2001 6:05:11 PM
From: alanrs	Read Replies (2) of 5205

to look for fat premiums full of other people's money if you want to sell options, and that means looking farther out in time, or near OTM where the premiums are a sensible fraction of the potential stock movement. As premiums came down over the last 3-6 months or so I have gone to the 3-4 month area for exactly the above reason. Since I typically write 1-3 contracts at a time, I need a larger premium in absolute dollar terms for CC's to make sense and often cannot get that with nearer term OTM calls. The one big advantage to this is that I have had ample opportunity to buy the calls back at very good prices without worrying too much if the stock spends some time above the strike price. ARS Edit: regarding SEBL, bought 100 shares 6/14 for $3902, sold .SGWGI (july 45) 6/21 for $406, bought back 6/25 for $253, sold again today 6/27 for $406. All net of commisions. Also bought my favorite .VLMAT (QCOM 03 100) on 6/15 for $635. It's been a while since I bought first, but this one has been good to me 7 times in the last year. I am beginning to really like this game.

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