Calls and Puts for Income Message Board

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Strategies & Market Trends : Calls and Puts for Income

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To: Uncle Frank who wrote (176)	4/14/2007 1:24:53 PM
From: Jerome	Read Replies (2) of 5891

Uncle Frank, its about time you visited here. Your input has always been first rate. "since you're writing out of the money strike prices, the premiums are quite small, << Actually the premiums can be generous. QCOM at 42.55 will net about 2.05 for the May 42.5's . I like to see some appreciation on both the purchase of the stock as well as a decent call premium. My ideal would be a 3% gain from the stock strike price and another 3% gain on the call premium. CSCO will come very close to that right now.The stock is at 26.68 and the May 27.5's are worth .70/.75. I think that a person does covered call writes from a number of different approaches. Some times I have spare cash and I just buy/write an at the money call to generate income. Other times I look for possible appreciation and covered call premium. Most of all I look for a safe position. (judgement call)

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