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: Uncle Frank who wrote (2106)8/19/2001 7:58:07 AM
From: Wyätt Gwyön  Read Replies (1) of 5205
 
hi Uncle Frank,

Good recommendations for buy-write practitioners, but you don't address the interests of those who are writing against highly appreciated long term core holdings.

i am a bit puzzled, Uncle Frank: you state that portfolio allocation is of "prime importance" (so you agree with my broader point), but then you say i don't address the interests of people whose portfolios are out of whack but who are more interested in an "opportunistic method for generating revenue during a choppy market" than in prudent portfolio allocation. i think i was clear in putting my comments in the context of a hypothetical investor with highly concentrated positions in a small number of large-cap growth stocks (the number could be arbitrarily larger, but if the asset class is the same, my point still stands).

if this person's assets are in a tax-sheltered IRA, then there are no tax consequences to realizing capital gains in overweight positions and rebalancing. OTOH, if the assets are in a taxable account, selling "pseudo-naked covered calls" is a distraction from the serious issue of taxation (which is itself a distraction from the serious issue of asset allocation). i think there is a compounding of distractions here that can lead our hypothetical investor astray; hence my points.

i think this hypothetical and nonexistent person has much more serious portfolio concerns than what's the best time of month to sell calls. there are lessons one can try to learn from others or many excellent books, or one can wait for Mr. Market to come to school. Mr. Market is a great teacher, as all eventually learn.
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