How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: David Walton who wrote (5744)	11/2/1997 9:50:00 PM
From: Herm	Read Replies (1) of 14162

David, I write CC because it is more conservative and always brings in income in the form of premies. The naked PUTs we have discussed from time to time and I just personally started to really consider it for myself since we should be bottoming out in the market and VVUS should start to climb again. So, the naked PUTs would add some premies to recover the recent (give back) loss sooner. You suggestion for using the deep in the money options as the collateral for the CC writing would have me a bit nervous since the time erosion would be working against you! I can hold out for the time better when I own the stock outright. By the way, had you written CC against CPQ you would have reduced your price drop by some of the $75.00 at your call buyer's expense. That is, unless you sold the sold instead prior to the recent market correction.

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