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Strategies & Market Trends : Strictly: Drilling II
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To: Cogito Ergo Sum who wrote (296)8/22/2001 10:09:33 AM
From: Art Bechhoefer  Read Replies (2) of 36161
 
Kastel, I don't think that trading options, even when it comes to the conservative strategy of selling covered calls, adds very much to relaxation. However, I have often recommended the locking in of profits on more speculative issues through the sale of covered calls. The guidelines, I emphasis are: (1) Confine this strategy to big companies, where there is a lot of stock being traded and where there is at least enough option activity to ensure something close to a reasonable market price. (2) Don't buy the stock and sell the calls at the same time. Buy the stock when you think the price is reasonable, and sell the calls when the stock price looks like it has reached a plateau. Timing in the trading of options is far more critical than in the trading of stock, since options are essentially wasting assets.

Art
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