Nosmo,
I only write covered calls on strong stocks that may have near term
volatility. Today, I bought USRX at 72 7/8 as it bounced off
support and immediately sold Aug 80 calls at 6.5 each. The stock
closed at 75 1/2 so I probably could have waited and sold later.
However, I like to use buy-writes or leg into the position with
a short lag time because this decreases risk, which is what this
strategy is all about. Larry McMillan wrote a great book with an
excellent chapter on covered writes called Options as a Strategic
Investment. I recommend it.
E-mail me at mj_burry@aol.com, and I'd be happy to share what I do
there, in order to keep this thread pure.
I am considering buying into more MCAF and writing more covered
writes, as it is definitely in a trading range. I wouldn't
write calls longer than Aug at this point with MCAF. Problem is,
the move down on high volume today isn't the stuff into which I
readily buy. One rule I have is never buy a stock just to write
calls. Only buy if you truly believe the company is incredible
long term.
Well, good luck. Stocks to keep an eye on: AMER, IOMG, USRX,
NSCP, ATML, ORCL, MSFT, These all may be trading at very attractive
prices soon (some already are) but, like MCAF, have strong growth
pictures.
Michael Burry |
