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

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To: Ali Husain who wrote (7147)	3/22/1998 7:44:00 PM
From: Herm	Read Replies (1) of 14162

Welcome Back Ali, I am planning to write Apr22.5c at $2 1/4 or higher. (it is trading at 1 7/8 but I believe that the stock will move higher a bit next week and I will get at least 2 1/4 or higher for it). My return will be about 20% if I get called out or not. I am not concerned about getting called. I still have the trader mind and I prefer not to be married to any stock. 1. Do you see any problem with my strategy? 2. Can you find a better call for Apr in SMOD to write? 3. I am looking for 15% or higher returns in CC writing, is this realistic? --------------------------------------------------------------------- Well, let's take a look at Doug Webb's killer option page at webbindustries.com You notice that you can either get it on the front end by selling in the money CCs and lowering your net cost basis or on the tail end by raising the strike price (IF you are called out)out of the money above your net cost basis. If you go for the in the money you collect a pretty nice premie and if the stock goes down you get to keep most of the premie and protect your downside damage. So, let us next take a look at some technical indicators, news items or earnings dates that might impact the stock. 207.95.154.130 At this writing, it looks like SMOD price may soon bounce off the lower BB as RSI increases. So, you may pick up that extra profit in your premies if you wait a little like you suggested. Also, Doug's two line chart confirms a possible bottom and an expected neutral box soon. webbindustries.com There is price support at these levels and yes 15% return on investment or more is possible!

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