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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Bridge Player who wrote (4561)	11/16/2006 5:09:05 AM
From: Hepps	Read Replies (2) of 5205

I'm with Charles Schwab; I haven't compared rates with the other on line brokers, and it could be that I'll want to move that account once I start for real, but for now I'm resistant to the idea. It isn't really a "Short Put" as it is cash covered. Q being where it is right now, I could assume that I would be called on the 37.50 position I sold and could close out the 1.10 Put that I had for .35. Final math, on notional strategy: COB 9 Nov started with 7000 Sold Jan 32.50 put for 110 Bought 100 QCOM at 35.20 Sold Jan 37.50 put for 140 COB 15 Nov Bought 32.50 put back for .35 Assume 100 QCOM 37.50 called finished with 7445 (transaction fees and interest ignored) 6 days with profit of 6.4 percent Again, I haven't taken the plunge yet, but am working through some scenarios that allow me to both profit and sleep at night. Curiously, I just looked at the Jan series, and can't find the same 250 dollar spread that was there last week (now 203). I suppose this is an indicator of increased market confidence in the stock. Hepps

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