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: blankmind who wrote (7137)	3/22/1998 1:05:00 PM
From: Herm	Read Replies (1) of 14162

Hi Blankmind, You see the potential for some steady income and downside protection. Yes, VVUS could shoot up past $15 and you would have to sell it at $15 IF YOU are called out! Thus, you would give up the extra profit. But, if you knew that ahead of time you would stay long without CCing, right? Covered calls is so conservative that it is the ONLY options trading strategy that is allowed in stock IRAs. That $1.00 premie on $11 is 9% return without margin! Now, imagine if your stock went to only $14 by the option expiration day, you would keep both the stock and the premie and get a chance to do it all over again! Of course, each time you collect the premie it lowers your net cost basis (nut) in the stock. You might be able to repeat over and over again before finally getting called out! Check out coveredcalls.com for premies on stocks with movement!

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