P&S and STO Death Blow's Message Board

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Strategies & Market Trends : P&S and STO Death Blow's

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To: Mike M who wrote (22781)	1/8/2003 9:16:32 AM
From: mishedlo	Read Replies (2) of 30712

You are quite simply wrong. Look up ANY book on options. The gain/loss up to the time you wrote the covered call is irrelevant. At the time you place the covered call, you would have an identical play (in risk/reward) by selling the common, sitting in cash and writing a naked put. The key is what you said. As soon as you write the CC your upside gain from that point on is limited. Gains form sale of naked put are limited as well. The risk/reward scenario is nearly IDENTICAL. Look in any book, ask CBOE, but there is absolutely positively no way I am wrong on this. M

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