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: David Wright who wrote (10679)	5/10/1999 12:19:00 AM
From: Teresa Lo	Read Replies (3) of 14162

Well, MACD is an oscillator, and perhaps the name Moving Average Convergence Divergence makes it seem like a trend following indicator. It has overbought and oversold "levels" and in both Etzkorn's book, and LeBeau and Lucas' book amazon.com classify it as an oscillator. Regardless, since most people try to buy on the upcross under the oversold line and vice versa, they are using as an oscillator. As for covered call writing, I personally think it's better to write naked puts since it is the exact same position and it actually costs less in terms of transaction costs and should the market be going down, you actually will lose less money doing this...and no, the risk is not "infinite". In fact it's the same as if you own the stock. I wrote a very long reply to someone eons ago showing the calculations and premise...oh, I found it... Message 8527201 Message 8535588

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