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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Dan Duchardt who wrote (1268)6/30/2001 2:13:34 AM
From: BDR  Read Replies (1) of 5205
 
<< If it goes above 27.50 I can capture the whole move and write calls or sell when it tops. If it tumbles I break even, or maybe even take the profit on the puts and hold on for the eventual rebound with or w/o covering calls.>>

Dan-

Covered calls has been the focus of this thread, but at the same time many of us, myself included, are aware that covered calls don't provide much downside protection and have been looking for a better hedge against a significant pull back in prices.

I have been looking at doing just what you described. If you are long the stock, short the calls and long puts then you have what I have seen referred to as a hedge wrapper, collar or fence. Do you typically leg into the various positions? Most of us are writing calls against stocks we already own when we perceive the stock has run up and has an increased chance of pulling back. Isn't that moment in time also when it would make the most sense to buy the put?
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