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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Knighty Tin who wrote (2286)8/29/2001 8:51:56 PM
From: Mike Buckley  Read Replies (1) of 5205
 
Tin,

why is the covered call profit revenue and the much greater losses on the long stock not a loss?

It is a loss. I didn't mean to imply that it's not. However, because I want to own the stock and would have suffered the loss of value in my long position anyhow, it sure is nice to have the revenue.

For me, the distinction of calling it revenue is important. I don't work for a living. I don't have a pension. I live off my assets. Being able to generate revenue by writing covered calls means I have a more likely chance of being able to make decisions about selling long-term stock positions based solely on whether or not I want to own the stock, instead of having to make those decisions partly because I need funds for living expenses.

--Mike Buckley
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