The Covered Calls for Dummies Thread Message Board

STOCKTALK

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 Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: JohnM who wrote (2747)	10/16/2001 11:23:57 AM
From: Dr. Id	Read Replies (1) of 5205

I've done my first round of quite preliminary reading of McMillan on selling puts as a way to get back into Qcom (assuming my 45s are called) and it looks like a strong strategy. The principle risk McMillan sees is having the stock assigned when the share price is actually much lower. But, since, as he notes in his McMillan on Options book, that's the same as being a long term holder of the shares, I don't think I increase my risk. Exactly. I had 1000 shares of SEBL which I planned to long term hold. Earlier in the year, I sold SEBL 35's a few times, and was called away the second time. I wasn't happy about in when SEBL headed to the high forties. When it settled back a bit, I sold SEBL 35 puts for about 3 months in a row. It lowered my cost to around 29. When the stock was put to me, it was at around 20. Now, with great foresight, it would have been better to wait and buy it in the teens. However, if I hadn't sold options on it at all, I'd be in the same boat (without the several thousand in premiums that I collected) as I would have held it all of the way down. I still think it's a good way to enter a position that you want, at a discount from the current price. dDI

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next