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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: HF who wrote (6551)1/25/1998 10:53:00 PM
From: Greg Higgins  Read Replies (3) of 14162
 
HF writes: ... how about a spreadsheet combo of covered calls and puts. .... My research seems to indicate that this is a better strategy than covered calls as long as you don't mind owning more stock and you can afford to buy it.

Selling the put along with the covered call, a strategy called a covered short straddle, is roughly equivalent to writing a cc on twice as many shares as you already have.

It suffers from the same drawback the cc suffers from, i.e., if the stock collapses, you end up owning shares of a weak stock.

Writing covered straddles is an esential part of Systematic Writing. See message 6108 in this forum.

Note: A covered combination is long stock/short call/short put with the call and put having different strikes.
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