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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Dr. Id who wrote (1701)	7/31/2001 2:26:29 PM
From: Mathemagician	Read Replies (1) of 5205

But isn't this only true if you hold the position for the entire time? What if you sell further out calls but buy them back long before expiration? No. Look at time premium per day for short term options vs. long term options. If I sell a one month option 12 times I will collect more premium than if I sell a 12 month option once. Further, the time premium of a 1 month call will decay faster than the time premium of a 12 month call, so that if I hold each for 2 weeks, the shorter term option yields greater profit. (All else being equal, of course.) dM

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