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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Ken Brown who wrote (8517)9/11/1998 8:39:00 PM
From: Herm  Read Replies (2) of 14162
 
Hi Ken,

I will add to the other answer to your question which was correct.
As you may be aware, using the Bollinger Bands (BB) and Relative
Strenght Indicator (RSI) as your technical charting timing mechanism
greatly improves your gauge of what your stock is doing and what the
trading pattern has been in the past. After some practice, a quick
look at the chart for any stock will give you a "feel" for the
direction. Thus, you have many choices of how to handle your profit
generating actions. In essence, you have a tool shed of trading tools.

If you like you can: 1 buy low and sell high.

2.buy low and sell at the money two months
out CCs for the premies. Wait to cover later.

3.buy low and sell in the money two months
out CCs for big premies. Buy loads of cheap
puts with premies to hedge & addition $$ gains.
Wait to close PUTs & cover CCs real cheap.

4.buy low and sell in the money two months
out CCs for big premies. No cheap PUTs? Then
short the stock to short against the box
(downward hedge) & addition make big $$ gains.
Wait to cover short stock & CCs real cheap.

Again, the most important aspect is knowing when to execute each
step of this approach. It is not hard to learn. There is no reason
for not making money in any type of market direction!
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