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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: LindyBill who wrote (1654)7/28/2001 9:42:23 PM
From: William  Read Replies (1) of 5205
 
Bill -

What is your plan of action? It is one thing to say you are going to write in the money calls, but exactly what do you expect to happen? Since you say you are a virgin dummy, I'm thinking you may be new to this option stuff, and we would hate to see you get messed up in the unexpected. So feel free to check out things here before jumping in.

With Q at $63+, an ITM would be the Aug 60 for example. It is going for $5.40. If you sell it and the stock is under $60 you get to keep the premium. But what do you do if the stock is 66, 70, or 75? Have you thought out what you will do under various circumstances? Or the SUNW - stock is $16.39, so ITM is 15's @ $1.70. Do you want the stock called? Do you want to avoid a call?What if the stock goes to 20 or to 10. Do you sit still or close out. If close, when?

I just want to know that you have thought these things through.

William
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