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

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

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To: Mark who wrote (4217)	8/29/1997 11:53:00 PM
From: Bill Kovalick	of 14162

Mark, Good post - I think you brought up a number of pertinent points in regard to this covered call (CC to those in the know) bizness. You can go nuts trying to decide when to sell em and when to buy em back (example: do I buy back my AMD's now for $2 [paid $4], or wait a little longer for further premium erosion. But what if the post-Labor Day surge kicks it up ??, - don't wanna miss that). Steve's comments about buying the cheap upstrike calls is probably the best solution to this dilemna that I've seen, especially for a wild-card stock like AMD (and probably VVUS). One news report can send these stocks flying up or down. This makes me wonder whether CC-ing is better suited for "more predictable" stocks like a ROST. I realize you give up some call premium when you go with lower volatility/more predictability but perhaps you also get less hair-pulling. -Bill K

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