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: Herm who wrote (10401)	4/16/1999 12:09:00 PM
From: Greg Higgins	Read Replies (2) of 14162

This is an excellent example of a low risk, low maintenance, long term approach to investing in a stock you like using LEAPS. (Excepting the math which Herm fixes in a later post.) However, if income is your goal, and you are willing to accept more risk and involve yourself in more maintenance, I'd look to the buying the 15 '01 LEAPS and selling the May 22.5s. Since you believe the stock is going sideways, if you can net $1/month (Right now the April is closing at Ask 1 1/8 the May is selling at BID 2 1/8) you can invest in LEAPS $12, get $12 return over the next year and still have $10 3/4 dollars on your LEAP this time next year (assuming volatility, stock price, etc all remain roughly the same). Don't get me wrong, I like the very low risk strategy Herm has laid out. I just got a different impression of your goals from reading your post.

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