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: Mark who wrote (714)	3/12/1997 9:55:00 PM
From: Maureen	of 14162

Re: Buy-Write Hi Mark, You asked when wouldn't you do a buy-write with covered calls... (buying the stock and selling the calls all at the same time) You wouldn't want to do it if you were bullish (atleast short term) on the stock and therefore felt the stock was going to move upwards (soon), because as it did, you would be able to sell the calls for higher premium by waiting for the price to rise rather than selling them immediately. You are taking a chance on it...it's one of those is a bird in the hand worth two in the bush type things... But for instance if you had bought ROST prior to the split and you really had a lot of reasons to believe the price would be going up - as most here do, then you would be better off waiting to write the calls somewhere near where you thought it had hit the peak or atleast climbed up more towards it - by doing so you will lock in more profit than if you had done a buy-write. (That is, IF you are right and the stock does move upwards). Maureen

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