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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Wyätt Gwyön who wrote (2112)8/19/2001 10:59:56 AM
From: slacker711  Read Replies (2) of 5205
 
where one gets caught up in a smaller issue (e.g., analyzing a company's "gorillaness" or figuring out covered call strategies) at the expense of the most critical issue of asset allocation. i myself committed this error over many months. at least, i view it as an error at this point.

I think your identification of the most "critical" issue may be a function of your current situation. If I remember correctly (and I may not), you were 100% long Qualcomm calls in the fall of '99. I later believe that you went 100% SDLI, prior to the JDSU takeover. Your newfound attention to asset allocation must be at least somewhat influenced by the success of these two positions. Asset allocation is important....but it is also pretty heavily influenced by the amount of risk that an investor is willing to take. The 711 at the end of my handle stands for my prediliction towards craps....just to give you an idea of where on the spectrum I lie.

As to my CC strategy...you are right that it isnt a true covered call strategy. However, it isnt really a pseudo naked call strategy either. If Qualcomm rises well above my strike price I am more than willing to let the stock go....the rest of my position will have appreciated nicely. That is actually why I wrote my post, I see the danger in writing more calls than I am willing to let be exercised. Since the market has been in a trading range over the last couple of months...it is hard to focus on the fact that a bullish run can happen at any time (like Qualcomm last winter illustrates).

Slacker
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