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Strategies & Market Trends : Value Investing
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To: Freedom Fighter who wrote (5793)1/17/1999 1:21:00 PM
From: Shane M  Read Replies (1) of 78476
 
I sell naked out of the money calls. If the stock remains out of the money I keep collecting premiums. If it gets into the money, I roll the calls out and sometimes up (depending on the premiums). So I effectively become short the stock because the options are in the money and can be rolled down if the stock price falls.

Wayne,

I'm not familiar with your terminology. What do mean when you say "roll the calls out and sometimes up" and "can be rolled down"? If you're selling calls and the stock continues to rocket up why would you still not get killed?

Thanks, Shane
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