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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: Lucretius who wrote (10814)2/6/1998 9:20:00 AM
From: Big Dog  Read Replies (3) of 95453
 
LT -- Of course the time to sell calls is when there is a rally. By doing so, one will limit upside, but will get a nice call premium.

I think a person can make a very nice, steady, monthly income by continually selling calls and ignoring the "big upside". My idea is to do this with a portion of my holdings and let the other side ride for those larger gains and for trading.

For example if a person has 10,000 shares of FGII, I have found that he could easily make a one point premium per month which would be nice $10,000 a month income. If some of the big gains are missed -- so what. And eventually the "cost basis" of the core FGII holding would be greatly reduced.

Since most options buyers lose money, it seems that the other side of that trade makes money -- the options sellers. I like the idea of owning something that does the opposite of decay -- would that be acrete?
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