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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: rydad who wrote (3353)1/30/2002 4:27:51 PM
From: Dan Duchardt  Read Replies (1) of 5205
 
rydad,

Why would I want to do a calendar spread? It seems simpler and more profitable to just write calls or puts.

If you can catch a healthy front month premium, calendar spreads can yield a nice return for limited risk. There has been some conversation about them on another thread recently:

Subject 51589

I have one right now that I wish I didn't RTN MAR-AUG30 calls. It started as long AUG30 but I sold the MAR30 too soon thinking the market was going to top out. A wiser man would have this thing for a net credit of $2.00 as of today. I have a debit of $.40. I badly need RTN to head back toward 30 to do well, but even if I can roll out the short call for another $.40 just before March expiration, I will have a no lose position.

Dan
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