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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 (10488)4/22/1999 7:06:00 AM
From: sergio   of 14162
 
Let me hop in just to test my skills. To me B.E. is break even,
and it meant if I bought underlying at $22 and received $2 for a
$25 strike call sold, my BE is at $20. I didn't lose nor gained
anything (other than interest cost of the $22 underlying with slightly
offsetting on $2). To me anything above $20 at expiry would be
profit. To me repair action is when underlying tanks and you take maneuovering positions to recoup or lower your cost basis further.
Yes any upside beyond $27 at expiry is a missed opportunity on the
upside. 5/22 for one month is near 24% return for a month which I
will accept anytime, or 2/22 is certainly acceptable too. Let't not
forget 10% in one month is pretttty nice. Too bad IRA accounts dont
allow for buying LEAPS.

sergio
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