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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Uncle Frank who wrote (4687)12/23/2006 10:31:17 AM
From: Dr. Id  Read Replies (2) of 5205
 
Okay, Frank... here's my latest play (it's some kind of spread...)

I sold QCOM Jan 40 puts back in late Sept for $4.40.

I then sold Jan 37.50 covered calls for 2.20 last month.

If the stock is between 37.50 and 40 in Jan expiration, I collect $6600, have 1000 shares put to me and 1000 shares called. Best scenario.

If the stock is below 37.50 (and not too far below), I pick up another 1000 shares for 34.40.

If the stock is above 40 (not looking particularly likely now), I sell 1000 shares and come out ahead as long as the stock stays below 46.60

At least I think that's how it plays out...
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