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Strategies & Market Trends : cash flow investing for retirement
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To: Paxb2u who wrote (41)7/26/2011 11:46:39 AM
From: deenoRead Replies (1) of 94
 
I find his disspationate view intrguing. I beleive his comment below is the story

"Remember that if I continue to write out-of-the money calls, all assignments are profitable when measured against the stock values when the call was written, even though they might be unprofitable against some earlier market price."

your comment

"he % u make is based on the underlying equity value, and that will most probably be decreasing also. So, to use ur 8%, (example)8% of a $100 is less than 8% of a $1000. ---Peace"

cash flow MIGHT be close. If its a dividend paying stock, the cash flow from the dividend would not change based on the price. If you adjusted your strike price always to 50 cents (assuming its always higher than the current price, NOT the purchase price) well, then cash flow would not change as it would be based on the number of shares not value. I beleive that <tyc thinks that since there is always a hedge (short calls) the overall portfolio might be down, but down less if he hadnt written the calls.

What I dont know would be if his rebound would be as good, I would think not, but if they were all 30 days calls he would only miss the quick snap backs. I find it plausable and worth more investigation.
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