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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Thomas Tam who wrote (3660)	4/13/2002 5:37:43 PM
From: Allen Furlan	of 5205

Thomas and others on the thread. The idea of ratio writing is worth consideration of all. I have been doing this successfully for years. Moreover a strategy worth considering is hedging, after all selling covered calls is a conservative hedge strategy. Here is an example. Last July I bought emc at about 22 and ntap at about 13, sold OTM leaps in IRA account and also sold brcd 04/90(knuar) calls naked in margin account at about 8. Since then I have been adding to ntap and emc and selling more knuar at various prices. Over all the hedge has worked out very well except I am making money in margin and am slightly behind in IRA. The concept is embraced by hedge fund managers using mispriced stock in long and short positions. The advantage to small guys like us is that small positions using options are possible. Last weeks Barrons had the following observation "The big mutual fund complexes don't teach managers how to handle the short side, which is probably the biggest differential of hedge fund performance" Good luck to all.

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