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: Herm who wrote (9305)	12/28/1998 6:39:00 PM
From: FR1	of 14162

Jeeez - another barn burner of a day. It's days like today that keep me from selling CCs. I'm afraid that I'd get called out and not be able to get back in with any muscle. Basically, my plan right now is to buy puts that are about 3 strike points out of the money. If the stock goes up a bunch (like 50 points or so), I'll buy new puts that are also 3 strike points out of the money. The puts are cheap compared to the gain the stock is making. If the stock keeps going up, I keep making money. If it ever turns south I will have a bunch of puts waiting on the downside to greet the falling stock. This allows me to keep the stock, and protect whatever gains I have made. I get burned some on the puts but make way more on the stock gain. I guess the only way I can get hurt is if the stock goes nowhere. I hope I am not missing anything in my plans. I agree with you that taking money off the table. Only problem is getting back in.

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