How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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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 (6556)	1/26/1998 7:48:00 AM
From: Greg Higgins	Read Replies (1) of 14162

HF writes: I do them [Diagonal Leaps] a little different than you do. I usually buy the long leaps one or two strike prices in the money to increase the leverage. Most people do them that way, Hank, and as long as you don't over commit to any one stock, you're likely to be OK most of the time. Remember, though, you can't write calls below the strike of the LEAPS, unless you're approved for naked call writing. If the stock falls below, you're putting the LEAPS on ice. I have the same problem with buying protective puts, it seems to me that if I'm going to spend the money on protective puts, I might as well go all the way to a short straddle/long combination position and just play the trades.

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