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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: JohnM who wrote (3464)	3/1/2002 5:00:48 PM
From: Uncle Frank	Read Replies (1) of 5205

>> I picked up $.80 a contract on the Sebl's by selling them back for $1.20 yesterday; then just sold them again for $1.75. When it gets good, it gets good. That is good, but maybe not quite as good as you think. I'm still in the game <lol>. You wrote at 2.00, covered at 1.20, and re-wrote at 1.75. If you hold until expiry and the calls are worthless, you'll have gained 2.00-1.20+1.75=2.55. I wrote at 2.40 and have stood pat. If the calls expire worthless, you'll only be .15 in the lead. But you also will have incurred an extra set of commissions, not to mention the mental anguish of having to make two additional trading decisions. I'm betting there will be a few more twists and turns in this contest :-). Race ya <lol>. duf@avoidingboredom.com

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