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

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To: Michael Hart who wrote (7682)6/18/1998 9:24:00 AM
From: R Sass  Read Replies (2) of 14162
 
It is important to realize that selling puts is the same as trading covered calls. Look at the profit loss picture, it will be exactly the same. Many people forget this. I always ask myself when doing a covered call if I would be willing to sell naked puts in the stock. If I am unwilling to sell naked puts, I will not do a covered call. The only benefit of buying the stock first and then selling the calls, is the ability to leg into the trade. This may provide a larger profit than would otherwise be available.
Ralph
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