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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Georgecc who wrote (11005)	6/10/1999 1:56:00 AM
From: Georgecc	Respond to of 14162

BTW - I don't know why the system didn't fill in my alias. I have a message in to webmistress to find out. I intended to be "GeorgeCC" indicating my commitment to this strategy (and also my initials). -George

To: Georgecc who wrote (11005)	6/10/1999 9:02:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

Hi George, Welcome to our forum Texan! When my mom retired many years ago she moved to Killeen, Texas with family. San Jose is a neat place. The rest of the state is kinda flat and dusty for me. :-) Hey, we should send you out to find our buddy Steve Peace who lives in Houston, Texas. Let's take a look at your questions. Just don't tell those call buyers about CCing. Somebody has to buy those contracts you know! :-) CCing our way is like being the black jack dealer and knowing the player's card during the play. Questions: 1) Any of you veterans care to volunteer what your real returns have been since this thread started? Or put it this way, what kind of return can one reasonably expect after gaining some experience? That one is kinda hard to answer George. I can honestly say that I have more money now from CCing now than when I started. Seriously, there are various factors that will impact the annual rate of return. For example, you can CC conservative stocks vs. tech stocks and get different results. You can write CCs against LEAPs (spreads) and make much more. If you are looking for the highest rate of returns then by far CCing LEAPs as a surrogate for the stock wins it hands down. That is a two edge sword George! More risk with higher returns. CCing LEAPs should rack in 60% to 75% income annually. Regular stocks is more like 20% to 50% income (unmargined) not including any stock capital appreciation. Note, it is possible to generate the CC income and still have the stock not appreciate or even drop in value. 2) When operating WINS, do you sometimes enter a position when the stock is at the top of its swing by buying a put, and then buying the stock at the bottom? Do you strictly enter when you think the stock is at a low? and then wait for the high before writing... (pardon my ignorance and maybe I didn't study the WINS approach well enough, if so just say so...) Typically, when applying the WINs approach you are buying low for your entry position. But, that is not to say you could not do what you suggested. If you are an astute investor with a working knowledge of the options buying/selling process and a very good chart reader, sure you could work the approach differently. As long as you net cost basis (NUT) is below the current selling price. You do need to check out the PowerPoint presentation in order to better understand the WINs process. With some kind of "rules" there no way to be consistent. 3) Do you always buy a put for the downside or is it safe to just use your call premie as downside protection and keep a vigilant watch? If you don't buy a put, then I guess you just roll down? How often do you bail instead? Buying cheap PUTs is the S in WINs. S for sideshows which are optionable. In other words, your choice depending on your risk/reward tolerance. Everyone is different and may not have the time to monitor the stocks closely during the trading day. A great deal also depends on the type of stocks you are trading. Yahoo vs. XRAY are light years different. You bet I would use PUTs with any of the internet vipers. I sometimes short against the box rather than buying cheap PUTs or CCing for downside protection. But, we try to stick to the topic of covered call writing here. Occassionally, we discuss other strategies when we get volunteers. To answer your question. It is possible to sell deep in the money CCs and repeat the process as a stock drops in price. Basically, your CCer's premies are hedging your stock depreciation as it drops. All of decisions are monitored by reading the charts with the BB and RSI indicators. That is the secret to the success rate. I have never heard of anyone losing money CCing with the WINs approach. That means over a period of time and not one or two bad trades because of their lack of understanding or lack of patience. Some folks jump the gun and love to trade in/out. Hey, that works but requires someone to be glued to the computer screen and have the right type of account. There are excellent forums at SI that are into that George. We are somewhat more conservative on this forum. Great questions George. There are not dumb questions when it comes to investing real money. Our rule on this forum is "you are not allowed to lose money." Pickup one of our freebie Excel templates at webbindustries.com and check out the WINs PowerPoint presentation. Also, if you want some leads on the highest CCs premies check out coveredcalls.com and their freebie newsletter.