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: Dan Duchardt who wrote (10391)	4/21/1999 7:39:00 PM
From: Dan Duchardt	Read Replies (1) of 14162

An update on my CYCH paper trade: CYCH seems for now to be settling into the sideways drift pattern I had anticipated, closing today at 17 13/16. As it stands, the May17 1/2 lot will be exercised leaving me the max upside of 10.7% (NUT = 15 13/16), while the June20 lot is 11.3% above the NUT (16). Still looking for a runup to bring the puts down to where I might buy in for protection. A further pull back could result in rolling down the calls again. For what it's worth, I calculated the "break-even" between my divided, rolled down position and David's suggested selling only the May20s and staying pat (not to be confused with the LEAP breakeven point Herm is teaching us about). At CYCH = 18 11/16, the returns are the same. Above that point, having sold only May20s would have a better return, plus the advantage of not getting exercised anywhere below 20, and the earlier expiration date. My next post will tell a tale of NSOL. Talk about ROCK and ROLL!!

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