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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Alias Shrugged who wrote (1695)	7/31/2001 12:37:31 PM
From: Dr. Id	Read Replies (1) of 5205

Writing the maximum time premium will not trap me in a synthetic long term position - I can always unwind the position. I basically have the same options/decisions that someone writing shorter dated calls has, except I have more premium - a larger cushion. Mike Mike, This does seem like a good approach in that it gives a greater cushion and a lower likelihood of being called away as the stock has more time to fluctuate. It seems that one difficulty may be psychological, in that I sell a longer term call at say 5, collect 5k in my account, and then plan to buy it back at 3, to make a 2k profit. However, it seems that I might be reluctant to add 3k to my account to make the purchase, and be tempted to hold longer with the hope of getting a better price to buy back. In other words, a greater cushion, but also more room for questionable judgment and greed to enter in... Dr.Id@justathought.pov

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