Berney; RE:" Duck, and Cover! "
>Nonetheless, I cannot see the purpose in writing covered calls at a stock's market top (presumed). What do I gain if I watch my stock go down? Looking forward to hearing your view (and others) on the issue.
Berney, I have only written covered CALLs in two situations: when I am accumulating stock by averaging-down; and, when I want to exit with a nice dessert after a big meal (^_^)
High yield dividend stocks come to mind, as do long-term kapital gains taxes..?
Sometimes, I get lucky and a CC written to exit turns out to be a profitable short-term short-sale, where I can buy it back down low, and re-sell 'em again (or sell the next month's option) after the stock bounces, but that's the exception, and not the rule.
I assume there are folks who buy-and-hold INTC forever, though I am not one of them. In which case, selling CC's at near-term tops would seem just as valid to me as "buying on dips".
Were I trading INTC, I would have tried to sell the 120 CALLs to exit today when the stock hit 123~124. Hell - I always sell too soon ;-)
The INTC chart looks ominous to me, BWDIK ?
-Steve |
