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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Bocor who wrote (5182)7/21/2011 9:31:08 AM
From: ValueGuy  Read Replies (1) of 5205
 
Yes, great article. I must admit that i tend not to use covered calls unless a stock I own has gained either 10% to 20% and I feel that there is very limited potential upside left, especially if its a bluechip stock.

However, I do know exactly what you mean about enhancing the dividend returns. There was a recent post in the value investing thread about this:

Message 27499435

Nowadays I prefer to sell naked puts on shares I want to own at pre-determined levels. Case in point was AAPL. Sold some Sep 300 Puts for 8.14, but because of the (crazy) price appreciation in AAPL I bought them back for 0.83 (only to see the premiums decrease to 20c+!).
Also, I am doing broker assisted trades on selling options on futures. Really wild swings in premiums, and one can't help feeling slightly panicky when you see all this. But thankfully the broker has a good track record so hopefully I won't suffer that one big loss that will wipe out my portfolio!
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