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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: M. C. Orme who wrote (1634)	7/26/2001 9:00:02 PM
From: alanrs	Read Replies (2) of 5205

I know there are those out there who disagree with me about this, but I prefer to sell further OTM calls with more time in them, especially for a stock like QCOM that I really don't want to have called. The most extreme example of this is the Jan 03 140's. I first sold 2 contracts on May 3 of this year, and recently sold them again. In both cases I bought them back at a profit, totaling $879.91 ($219.98 per contract,net). In neither case did I catch the high or the low, just relatively higher and lower. The total time they were open was 7 weeks out of 12. It would have been hard to match this with calls one month out. I'm not saying this is a good thing to do. I am saying you should LOOK AT higher strikes a few more months out to see if that makes sense. This is particularly true if you don't want the underlying called or don't want to get into the "repair" morass. You don't have to hold them to expiration, and they do move a greater % than the underlying, allowing for reasonable profit. JMO ARS

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