SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Herm who wrote (5121)10/1/1997 1:01:00 PM
From: jim clabaugh   of 14162
 
i'm definitely working on defensive strategies.
i was able to keep up with the SCOP movements until friday.
i had lowered my basis about $7 over 3 months, but since friday, i've been beaten and brused.
it's going to take a long time to repair the next $8-9.

i do have a question.

you suggested selling cc's out several months.
yes, it brings in larger premiums, but it also locks in the loss for a longer period of time. if the stock turns around and starts climbing, wouldn't having a nearer expiration date protect you from being called out with a loss?

example:

basis $20
stock $15
sell 17.5c october
stock moves up 1/2 point per week.
still have stock at october expiration and do it again for higher strike price in november.

or

sell 17.5 december
stock moves up 1/2 point per week.
stock is past strike price long before december expiration and you have locked in a loss at 17.5.

i know this would work if the december premium was 2-1/2+ so you lowered your basis to the strike price.
but it also requires that you hold the stock til december to cover the call. if the stock starts tanking again, you can't get out of the stock without buying back the cc and paying all that time premium back to the seller.

re: overall portfolio. the option toolbox is my lifesaver. thanks.

cheers,
jim.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News