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Strategies & Market Trends : Are you considering quitting your dayjob to daytrade?!
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To: Kevin McKenzie who wrote (288)1/20/1999 5:24:00 AM
From: jttmab  Read Replies (1) of 611
 
Kevin,

"One would be very wrong."

Re: I've certainly been wrong more than a few times. :o)
The argument behind the statement on selling covered calls was...
If you sell a covered call you'll collect the premium. If the underlying stock crashes, you've lost money on the underlying stock, but you still make a profit on the option. If the value of the underlying stock goes up and the option is exercised, you sell the underlying stock which is still profitable to cover the exercised option and you still profit from the premium of selling the call. One profits from selling the call in either case. Perhaps I've missed something?

Best Regards,
Jim

P.S. I've never signed the papers to allow trading of options in any of my accounts to avoid the possibility of acting on any impulse to trade options.
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