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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Greg Higgins who wrote (6112)12/12/1997 2:07:00 PM
From: R. Gordon  Read Replies (1) of 14162
 
Hi Greg,

>>>I covered my CCI Jul 130 calls today with Jan 2000 110 Calls. Sold 200 shares (at a 3% loss) to do it, but now have 4 Leaps + 200 shares. If the stock recovers, I sell the shares at a profit to cover the loss and eventually roll forward the calls on the LEAPS. The leaps cost
me 34 1/4 cash money. This is $30 / share less than the margin cost of the securities; plus, I don't pay margin interest on the rest of the $64/share. Now all I need is to generate $34 writing calls over the next 2.5 years. When the stock recovers, I'll probably sell the
remaining shares and buy more leaps. Maybe not CCI, but something. <<<

This is really interesting. Could you go over your trades and explain your strategy in a little more detail - I want to be sure to understand it. My concern with your strategy is that if the stock takes a dive, your leaps are worthless - at least ofset somewhat by the CCs.

Thanks,

Richard
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