SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Herm who wrote (8288)8/19/1998 8:19:00 PM
From: Deep IntheMoney  Read Replies (2) of 14162
 
Herm, I think STOPLOSS should be mentioned in the W.I.N. for the
entry point and the (I) step. For the benefit of people who are
seriously considering starting somewhere.
Especially since most of us may want an entry point if you
don't already own the stock when the downward trend is reversing.
And you really don't want to write the calls when the stock
is at the bottom.

Personally, I like trailing STOPLOSSes. If I check all indicators,
confirm an upward trend and make my entry but the trend
reverses and drops much further I would exit at most 25%
loss and stay alive to fight another day.

Now, remember I made the entry betting that it would go up.
If I write the call before it goes up, I give away my upside
to protect my downside(which I am not contemplating, or else
one should not enter.) So write CCs at peak.

Stoploss is strictly individual but should be carefully chosen
to prevent whipsaws and depends on volatility of the stock too.

This will make sure that history won't be repeated (APM).
Every analyst and their mother was recommending APM. And it
dropped off the radar screen!!! At some point stoplosses of
portfolio managers were triggered and it was an Avanlanche all the way from 35 to 4!! That is a possibility with any stock. Even DELL.
I learnt it the hard way.

In the I step. Remember we're putting all the eggs betting that the trend will reverse and go up. What happens if it sinks to the bottom?
And imagine all the PUTs you sold on top of that. That could wipe
you out completely!! A simple stoploss can ease the pain.

Herm, do you always prefer leaps. What are your stoploss criteria and also for entry points.

thanks,

Deep
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News