The Covered Calls for Dummies Thread Message Board

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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Jerome who wrote (4380)	4/8/2006 9:03:37 PM
From: alanrs	Read Replies (1) of 5205

Any thoughts from thread viewers on using margin to buy stocks and using the covered call premium to off set the margin interest rate? Like everything to do with investing, the answer always starts with "Well, that depends..." I personally wouldn't touch margin right now, although I was margined anywhere from 5-25% of my trading account from 2/2/04 thru 9/6/05 (I checked). Of course, in the broader context of total investment assets, it never was over 10%. It depends on your risk tolerance, and your self control. I did notice that once on margin it's pretty easy to do the "just a little bit more" routine. I try not to do anything that I couldn't survive well, no matter how it turned out. Right now the overall odds look no better than 50-50, and I'd prefer better odds than that. ARS

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