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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: edamo who wrote (1847)8/9/2001 10:45:12 AM
From: PAL  Read Replies (3) of 5205
 
ed ... i was sick but fine now. no krispy kreme. it is overrated. as you know i am half in cash and half in ltbh in a very good company.

my objective is to get decent return month after month with known and acceptable risk. the measure is that am i better off a month from now by participating in option as compared to doing nothing.

using the stock as cover, and cash as the source in case of assignment, i prefer to do a strangle. think of it ed, which side would you rather be in the case of a strangle?

have you seen a case where a person would buy a strangle on qualcomm? of course not. because the risk/reward is not there, so it is not profitable. if buying a strangle is not profitable, would the reverse be true? yes, it is. then why not do the reverse. by selling a strangle, you can get 3% to 4% steady return month after month as long as the market stays like this.

as always ed, good to read your postings.
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