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

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To: Herm who wrote (7268)4/13/1998 12:58:00 PM
From: hal jordan  Read Replies (2) of 14162
 
Herm,

You initially started this thread naming it "An Ongoing Real Case Study". Okay--how about potentially expending on that theme to try this out for interested readers. Maybe a monthly group exercise:

securitytrader.com

This link takes you to compounding tables of what is theoretically possible writing covered calls starting with a $10,000 base. How about giving it a group crack? If we are successful, the result would be over $1,000,000 at the end of three years (not counting taxes), given a 14% gain per period. Do you believe this is possible? If people think this can be attained, perhaps it is worth a try. This would expand your original theme into a specific goal for the group. A goal of becoming a millionaire in a few years based off CCing! Crackpot idea--maybe. But if not, we could try here, or start a new thread specifically for identifying monthly candidates and see what our "compounding periods" actually net us.

I don't know if this exercise is possible, given that stock prices, and therefore CC prices vary on a daily, if not by the minute, basis. None of us are constantly on this medium real-time to take advantage of real-time updated information. But perhaps if we pick one day during the month to select our best picks to write CCs for this goal, it can be tried out. Does this make sense to you?

What do you think?

Hal
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