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 (10547)	4/26/1999 12:57:00 PM
From: David Wright	Read Replies (1) of 14162

Herm, You wrote: "if the stock is choppy or stalls you may actually do worse. You assume more risk with monthly CCs in my opinion." I completely agree that there is more risk if you are not in a position to essentially day trade your positions. By that, I do not mean trading incessantly for a few 1/8s, I mean being prepared to do so if something goes awry. If you can watch a live ticker, and can trade quickly on those killer moments, you can not only mitigate the risk, you can beat the pants off a longer term strategy, which has to absorb the losses without a real-time fight. You also get to take advantage of compounding over a shorter duration. This is similar to the effect that you see when you increase your payment on a home mortgage, and watch the interest cost dissolve as you do. The banks hate you, which is why they used to have the pre-payment penalty clauses. "In fact, you will always hear me go long and deep when that upper BB is tagged and the RSI is sky high. " I don't understand exactly what you mean when you say "long and deep". Are you talking about buying an OTM put for downside speculation/protection?

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