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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Mathemagician who wrote (1937)8/12/2001 9:23:03 AM
From: rydad  Read Replies (3) of 5205
 
Mathemagician,

I just spent a good 15-20 minutes typing out a reply/rebuttal to your analysis and by the time I finished and was proof reading it, I realized I came to the same conclusion as you.

However, I would like you to verify the validity of an additional statement that I feel should be mentioned.

Maximum loss occurs when the share price reaches zero.

But this is the point that I am trying to prove to myself.
After this stock market thrashing we have taken over the past year or so, how much further can we go down? I know that everyone tells me this is dangerous thinking and I realize that even another 20% or more is very easily possible.

But what is the probability that a stock will go to zero?

Anyways, wouldn't you think that we are closer to the bottom of the market than the top and if we did get a substantial further dip, eventually we will head upwards again.

Just out of curiosity, do people still believe the market will come back up again some day? Otherwise why are we putting our money in stocks if we think it is dead money forever?

I am hoping the downturn is not eternal and I am biding my time by writing calls and learning all these new strategies from you all.

Having a great time here on CC4D

Respectfully

Ry
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