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: Clean who wrote (7612)	6/10/1998 11:38:00 PM
From: Tom K.	Read Replies (1) of 14162

Clean, American Eagle (AEOS) is a nice store.... I've made purchases there. From an investment standpoint, there are stocks with stronger earnings which is one of my criteria. However, if you decide that this is the one for you, consider selling July 30 PUTs @ $1.00. If you ignore the brokerage requirements (which are low) and use my ultra conservative approach, put $1700 aside (margin account) for each 100 shares you want to buy. The return should be $100/$1700 x 100 = 5.9% for 1 month or 70% annually. I'd suggest selling more then 1 contract to minimize the commission impact. If you wind up being put the shares at $30, then you're ready to use CC'ing. If you're not put the stock, then feel free to lament to me about how depressed you are to have to put these premiums in your pocket without buying the stock. Good luck.... and let us know if you do it. Tom

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