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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Bridge Player who wrote (4648)12/8/2006 1:08:49 AM
From: Hepps  Read Replies (3) of 5205
 
Bridge Player, I went for a covered strangle as well.

Sold QCOM APR 45 calls yesterday for 1.70 and APR 35 Puts for 1.40. As I did this against only a portion of my portfolio, I can not imagine an outcome that I'd be unhappy with. The Calls yield around 11% (annual) if the stock doesn't move, and 55% (annual) if I get called. The put side yields 9% annual. If I get the stock put to me, cost basis goes from 39, (current price) to 35.45 ((39 + (35 - 310 options))/2.

I haven't factored in interest, dividends or commissions; almost a wash between the three I think.
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