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Strategies & Market Trends : Covered Calls

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To: Bill J. Landis who wrote (39)	5/11/1998 7:44:00 PM
From: tchphysics	of 86

<<25% Boring!?!? If that's not annualized, then I think this bull has trampelled the brains clear out of your head!! ;). Congrats.>> 25% is not annualized and does not account for margin. The if-called return using margin is actually 59% (468% annualized). Not too bad. But this does not look so great when you compare it to the 89% margin return I would have been sitting on, had I simply held the stock and sold today at 17. Or how about the guy that bought those Jun 12.5 calls from me at 1 15/16 on May 4th. He or she is sitting on a 159% return. But let me make the point again. When we write covered calls we have to pick a stock that we are comfortable holding and then write calls that provide a return that we are comfortable with. Then you can't look back (as I am doing above).

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