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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Dan Duchardt who wrote (1877)	8/10/2001 9:41:58 AM
From: RGM	of 5205

How about starting a thread on selling naked puts and calls. Since I have been 100% cash in my brokerage account as of a few weeks ago, I have begun to accumulate a portfolio of naked put positions for those stocks I would want to own for more than one year. The strike prices for these naked put positions are about 10% to 25% lower than their current prices with expiration dates in the January - March 2002 timeframe. I have the expectation of having these stocks exercised or "put" to me on or before their options exercise dates. The basic assumption that I am making is to own these stocks at these lower strike prices in anticipation of an economic recovery starting during 2002. If I am wrong about the timing of the beginning of the economic recovery, I may be owning these stocks at prices lower than the exercise strike prices (if I take no subsequent action - which is highly unlikely). If these stock prices never get exercised or put to me, then I shall make a bunch of money from selling "insurance" to put buyers without owning these underlying stocks. Rob

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