SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : The Covered Calls for Dummies Thread
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: robwin who wrote (1932)8/11/2001 10:43:05 PM
From: BDR  Read Replies (2) of 5205
 
<<I would have kept quiet about the famous ELON cc debacle but I cannot when you attempt to equate that with the advanced option strategies PAL brought to this thread...>>

I don't think that we have to limit ourselves to just one option strategy. But do you realize that the strategy that PAL was suggesting doubles your risk on the downside and provides only a limited upside gain? He was incorrect when he said it was appropriate for a neutral to bearish strategy. He was incorrect when he said that :

"No one knows where this market is going the next few months. Everyday we hear from so-called experts that the market will go north, yet the next guest on the show states the opposite...Using the "CSS", it does not matter. It covers in either direction."

If you don't believe that, see Dan's post with the downside risk in tabular format::
Message 16197679

or view a graphical presentation of the same strategy applied to a different stock:
optionmax.com
Note at the bottom of the screen where it says- Maximum Loss: Open.

A covered straddle amounts to taking a covered call position and doubling your exposure by selling a put without providing for any better loss protection beyond what the extra premium brings you. Kind of like advising someone to double up on ELON and sell calls for protection. Better than advising a triple but similar.

At first he was wrong, then he was rude. Follow his advice at your peril.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News