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: Tom K. who wrote (7575)	6/9/1998 10:39:00 PM
From: Clean	Read Replies (1) of 14162

<<I believe that you buy the LEAPs to open (they serve as an inexpensive way to buy the stock) and then you sell short term calls to open against the LEAPS. As Herm points out, you should be able to do this for several months before the LEAPS begin to lose time premium and have to be closed out themselves>> But how is this covered? If your short term call was in the money, how could it be covered by an option to buy? or do you never let the short term get to in the money. And I would presume, both are written at the same strike price? Regards.

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