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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: David V. Lott who wrote (7026)	2/26/1998 5:47:00 PM
From: Douglas Webb	Read Replies (2) of 14162

Does anyone know of a site to retrieve historical data on option pricing? This is difficult, if not impossible to come by. There are some 6000 optionable stocks out there, each with 10-60 options. That's a lot of data, and I don't know of anyone who'll spend the money to archive it and then give it away for free. There's also the problem of these things expiring all the time, which makes it a bit unclear how to usefully archive them. But, if you find one (even a fee-based service) let me know. I have noticed a nice 20% to 25% monthly yield on OTM spreads provided the selected stock does not depreciate drastically. This however risks generally $3 to $4 for every dollar of premium. Look at it this way: You can risk $25 on a stock hoping for a $5 profit if the stock goes up 20%, or you can risk $4 on a BPS spread hoping for an $0.80 profit if the stock doesn't drop more than 10%. Both are 20% gains, but you're risking a lot more cash with the stock, which leaves you vulnerable to steep drops. The BPS limits your gain if the stock takes off, but an opportunity loss is a lot easier to live with than an out-of-pocket loss. Doug.

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