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: Herm who wrote (4332)	9/2/1997 7:18:00 PM
From: R. Gordon	of 14162

Herm, I find that the most difficult time in a covered call position is at the point where I am entering. If I buy the stock naked waiting to leg into the position - there is a good chance that I could find myself in the position that Doug is in. One solution is to only use 33% margin. If I were to buy/write, the margins would be low but at least I would be covered. To buy the option first and take over the stock if it is in the money sounds ok, but it still requires being right and paying the premium instead of charging someone else the premium. Selling naked puts appeals to me - but often one could have an even lower cost basis by selling the call since calls are more expensive than puts. Anyway, I'd like to hear your thoughts and those of others. Oh yes, I found a great tool - it is an options calculator. If I want to sell an option when the stock gets to a certain price, I can calculate the probable price it will sell at when it gets there and simply place my order and go about my business. The caluclator is at: dailystocks.com Thanks, Richard

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