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Strategies & Market Trends : cash flow investing for retirement
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To: deeno who wrote (4)7/21/2011 6:38:51 PM
From: tyc:>Read Replies (1) of 94
 
That is one of the reasons Short Term calls are used..... their premium erodes faster.and even if you're assigned the stock is usually within range to allow repurchase because little time has elapsed.

Also, it's axiomatic that expiring calls should NOT be purchased because of the risk of loss. If they are a bad BUY, they are a good SELL. Statistics of my post show nine calls exercised and all the rest expiring worthless. There's no way of knowing which, but I'll bet 70% expire worthless over time.,

Important to realise that even when the call is exercised the call premium was INCOME, because the stock transaction was profitable without the call premium..... if you selected an o/m strike. (It's paradoxical that loss of market value can occur only when call is not exercised).

Dividends are "at risk" only once each quarter. If you want to avoid that risk don;t write a call on that stock that month. However the risk of losing the dividend is usually inconsequential.
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