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

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To: Don Westermeyer who wrote (7040)	3/4/1998 11:44:00 AM
From: TJ Reynolds	Read Replies (1) of 14162

Fellow Investors, I have found this thread to be most enlightening, as I begin my "career" as a CCer. However, reading all these posts has given me a headache. I was hoping a few of you good natured people could help a rookie get his feet wet and not drown! I had a few simple question regarding the strategy: It seems to me this is not the most prudent strategy in the face of a bear mkt as your underlying position will continue to lose value forcing you to continue to sell the options until the stk comes back. Or you avg. down yr cost over time, provided the option prices dont go as far south as the stk price. What do you do in this situation? Ive seen the phrase "repair a position", is that what you neeed to do? What does that entail? When searching for a suitable stock to CC, do you look for a stock that looks stable? A stock decline doesnt seem optimum, but neither does a rise! What is BPS? When selecting the option, is it just preference when choosing between OTM or ITM strikes? Are you better off a far out settlement date (should be higher premium) or better staying short and churning? Sorry to clog up the thread with these questions, but Im sure there are plenty of rookies following who have similar questions, so I deceided to ask! Sortin' it all out, TR

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