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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: drsvelte who wrote (6033)12/6/1997 4:06:00 PM
From: Greg Higgins  Read Replies (1) of 14162
 
drsvelte writes:

My problem is what you alluded to as "Then I have to go and find a different stock to put it into." How does a seasoned writer do this?


I don't know any seasoned writers. I think of myself as battle weary. :-)

Here's what I want, note this may be much different than what you want:

1) Safety of principle

I hate to lose money. Plus, I'm a really good contrarian indicator for day trading. When I buy a stock (sans a cc), it goes down.

2) raw ROI of 40% (raw ROI is before margin costs)

( Premium + (strike - cost) ) / (cash outlay for stock) * 12 / (number of months to expiration) * 100 >= 40 (If I like the stock, I may let the percentage drop some.

3) opportunity to repeat (the stock doesn't get called away)

In the ideal scenario, three months after I buy the options the stock drops to my cost price, I buy back the options for 1/3 what I sold them for and the next day the stock pops up 10 points I sell the 6 month calls and the stock hangs around there for a while until 3 months later it drops suddenly to my cost price and I buy back my calls and the next day it jumps up 15 points and I sell the 6 month calls and the stock hangs around there for a while until 3 months later ....
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