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: B. J. Barron who wrote (8553)	9/13/1998 4:45:00 PM
From: Herm	of 14162

Hey B.J.! Playing DOW stock and applying W.I.N.S. is perfect for very conservative investors looking to double their returns on DOW stocks. That should be a fairly easy going. I enjoyed hearing from you and the fact that you have been able to lower your net cost basis (nut) by using the repair strategy. It works best when the stock is bouncing back after an extended drop. By the way, I learned about the approach at one of the freebie CBOE's work shops. I'm not that smart but I know it fits in the tool shed. Also, writing CCs against the GT LEAPs can be referred as a diagonal or calendar spreads. McMillan talks about in in chapter 14 and in chapter 23 on spreads combining calls and puts. Otherwise, your brokerage firm may have a dumb look on their faces because they never learned about it in school 20 years ago. :-) Again, the LEAPs are purchased first and then the CC calls are written as spread at a higher strike price than the LEAPs. If the calls are exercised you will then cash in the LEAPs at a lower strike price to pay for the higher strike calls. Beautiful cover with a nice profit.

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