How To Write Covered Calls - An Ongoing Real Case Study! Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: John B. who wrote (4099)	8/24/1997 2:28:00 PM
From: Herm	of 14162

Well John, That's one way of expressing it! "If i understand correctly, from McMillan and you, maybe a general rule for BUYING calls is to attempt to purchase a call with the lowest amount of time value in proportion to the increased premium cost. Maybe, a general rule for selling calls is to determine the resistance level of the underlying stock and SELL the covered call with the highest amount of time value left." If you mean the highest amount of time value relative to intrinsic value. Yes, you will rarely get called out. But, you won't make as much each month. If you gauge the resistance and momemtun then you can get a more exact strike price. If you do the counter moves we discuss in this forum you can also increase your returns and lower the risk of being called out! What I'm working on now is how to gauge the momemtum of a stock and come very close to a calculated price range on options expiration dates. As you know, every stock seems to have a different pace and turnover of traded shares. If you could compare how many shares are normally traded and the relative price movements, you would be better able to calculate your strike prices. What I need help with is finding the data on web sites. I need the following either as a raw number or calculated: 1. Average Monthly Volume 2. Average Daily Volume. 3. Outstanding Float Here is two formulas I'm trying to calculate. ------------------------------------------- Rate of turnover=Avg.Monthly/Float = %? With this information you can compare two stocks and decide which one will give you higher premies since the higher the ROT the more violent the stock movements. The average monthly is the hard data to obtain unless you manually do it! Days to trade the float=ROT/Avg.Daily Volume= days? This would help out in determining the number of days and the impact of a short squeeze would have on a particular stock. And, you can better guage potential price moments for a given number of remaining days for a particular stock. Any ideas anyone?

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next