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: NateC who wrote (10057)	3/24/1999 5:45:00 PM
From: David Wright	Read Replies (2) of 14162

Herm, How about a critique of my first two tries at the WINs strategy? Monday 3/22/99 Bought 500 shares of SAVLY @ 12 1/2 (on margin) Sold 5 QVY MAY15C for 1 5/8 used proceeds to buy: 8 QVY MAY17.5C @ 1 Tuesday 3/23/99 Bought 500 shares of MWL @ 13 on Tuesday 3/23/99 (on margin) Sold 5 MWL OCT15C for 1 3/8 used proceeds to buy: 5 MWL May12.5C at 1 11/16 Note that I tried several different expiration date combinations. Both sets of combinations net out to pretty close to a zero option cost basis at the combined opening of the positions. In other words, my sideplays are being paid for by the buyers of my covered calls. I am a little troubled by the lack of downside protection by going to a net zero position right away. Please pick this apart. You can't hurt my feelings, even if this turns out to be a case study in how NOT to do WINs. Thanks

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