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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Allen Furlan who wrote (3643)4/12/2002 2:55:35 AM
From: Uncle Frank  Read Replies (3) of 5205
 
>> Many participants of the thread indicate an option buyback at lower price as a positive event. The stock price and option price should both be considered in order to determine long term profit.

That's dependent on the intended holding period, Allen. Many of us write against very long term core holdings, and don't concern ourselves overly with short term price fluctuations. We regard cc's as a method of generating income without disturbing our positions, and measure the efficacy of our approach purely in terms of net retained premiums. As a result of repeat cc sales, some of our stocks have adjusted cost bases of zero or less.

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