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: Mark Z who wrote (10280)	4/9/1999 7:11:00 PM
From: NateC	Read Replies (1) of 14162

Indeed, in only 4 of the past 12 months did you make more $$ CC'ing CMGI. That is, just holding the stock uncovered was the better investment. But who knew when the stock was at 40 in December that it would jump 600% by April? A CC is in effect shorting the stock and with fast movers, you can 'lose' or just not gain as much. ALSO, bear in mind that if you only get 1/2 of the monster run-ups, you're probably still getting a pretty good return on your investment and shouldn't feel bad because you didn't get all of it. Its just being more conservative. The only thing I might disagree with a little...(excellent post Mark)...is that if you CC a stock that takes off on you...and you didn't bother to buy the nice protective upstrike call...to protect you from runaway.......if you buy the CC back near expiry....generally you have at least made the time premium....which you also pocket..as soon as you roll up to the next month.....agree??...this of course disregards commissions

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