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

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To: Herm who wrote (8214)	8/15/1998 12:23:00 AM
From: virgil vancleave	Read Replies (3) of 14162

i usually put my orders in by voice if i do a covered put combination. i can do this online, but i would have to sell short first and then sell a put in a separate transaction after my short sell. i do use the online method since if i am short i sometimes will just stay short until the stock price hits a trend line or support area on the chart. as far as the outcomes, there are a couple of possibilities. if you sold the put and the stock continues to slide, it is pretty simple. you just get put the stock and you are covered. this pretty much happens automatically. now, if you are somewhat proficient on reading the chart, you can hold a short position and then sell the covered put when the stock price hits a support level as mentioned above. then if the price moves up you can either buy the put back and sell one with a higher strike price or you can attempt to repeat the process. depends on where you feel the stock price is going. now if the stock goes up (worse case for a short sale) you could once again buy back your put and then even sell one with a higher strike price. my opinion is that the risk with covered puts is less considering that the stock price falls much more quickly than it rises and you generally have more time to make decisions or get trades through. i especially like this on stocks which are just starting to break down and cross the trendlines. as i posted earlier, i will post a few picks which are paying acceptable premiums later this weekend. by the way, someone posted they did not like regal. i use regal and like them very much. twice this week, i either got the high or the low for the day. the low was my short cover this afternoon and the high was my short sell 3 days ago. my commissions are slightly higher, but it is well worth it to me. it is about 20 per trade and 29 for the first 5 option contracts and 1.50 for each option after the first 5. it looks like the market has a lot further to go down here. my nke puts are looking good. just read a statement by the company and it ain't looking good for nike. hope this helps.

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