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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Dan Duchardt who wrote (1497)	7/18/2001 7:23:54 PM
From: alanrs	Read Replies (1) of 5205

Dan It is always worthwhile to compare cash backed put writing with a comparable CC position to see which works out better. I wanted to run thru what I just did today and see if I've got this right. Of course I didn't do the exercise before selling the put, but that's par for the course. Anyway, I sold the Jan 03 25 put for $580. My potential investment is then $1920, should the stock go to $25. This gives me a return of 30%. If I had bought the stock at $3500, and sold the Jan 03 35 for 1500, my investment would be $2000, and if the stock went to $25, I would be $500 ahead (the 1500 premium minus the 1000 loss on the stock), for a return of 25%. Am I missing anything? Thanks ARS

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