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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Agamemnon who wrote (214843)1/16/2003 1:34:50 AM
From: patron_anejo_por_favor  Read Replies (2) of 436258
 
Don't get me wrong...there are clearly times to use covered calls (I have occassionally in the past, and certainly will in the future).

My point was, it's hardly a sound strategy at the top of an 18 year bull market, with insane valuations and huge downside risk on the underlying. I'd rather do it on a channeling, reasonably low beta stock (preferrably one that pays divis) as a way to extract more income on an investment that makes sense to hold longer term. In other words, "covering" with call sales is a foolish excuse to "buy and hold" an overvalued stock.
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