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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 (9545)	2/1/1999 12:31:00 AM
From: Jerry Catalfo	Read Replies (1) of 14162

Looking for advice on my first covered call. I am planning to write covered calls on Merrill Lynch Feb 70's. The premium is currently $7 and the current price is $76. My understanding is that 85% of options expire worthless. My question is: with the strike price in the money by $6 what are the chances that it will be exercised and I will be forced to sell my shares at $70? My thinking is that MER will be flat to slightly bearish going forward but I want to try and create a bit of income from the shares that I already own. Any comments are appreciated. Jerry

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