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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Mike Gordon who wrote (13741)6/30/2001 5:46:13 PM
From: Dan Duchardt  Read Replies (2) of 14162
 
Mike,

The only thing I have heard that sounds connected to what you heard is a movement to begin trading futures on equities instead of only indexes and commodities. Futures are different from options in that they do not have time premium. The difference in price between a futures contract and the underlying index is just the cost of money over the life of the contract. Futures offer no protection against loss from a move in the underlying, but they afford incredible leverage. If it happens, futures contracts will compete with existing instruments, but I am inclined to think they will dip into the equities market more than options. Not my area of expertise, so I wouldn't take that to the bank.

Dan
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