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Strategies & Market Trends : Covered Calls
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To: Bazmataz who wrote (6)5/3/1998 6:28:00 PM
From: tchphysics  Read Replies (2) of 86
 
<<I tend not to annualize my yield, only because I think it falsely inflates what I've actually done. After all, anyone could make 1% in a day of trading, but annualizing that to 365% in a year clouds what you've really done.>>

I absolutely agree with what you are saying here. I only annualize my returns to help me decide which of several options to write. For example, with GLM you might write the June 25's at 1 1/2 or the July 25's at 2. How do you decide among the two? The July calls provide a better return, but in terms of an annualized return the June's are significantly better. That is all that I use them for. I certainly do not expect to get the 200% and greater that the annualized returns would have me believe. I'll be very happy to just beat the Index 500.

Thanks to everyone for supporting this effort so quickly. I hope we can make this into an informative and friendly forum. So far, we're on track.
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