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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: OX who wrote (11344)	8/4/1999 12:47:00 AM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

OX writes: how about naked front-month OTM calls (1 strike out). if it rally's up, buy the underlying to cover (buy on strength!) or buy upstrike calls to cover. How do you make a small fortune in the stock market? (Start with a large fortune!). The one problem with naked calls is they can turn an entire year's worth of trading profits into a loss over night. Bear Call Spreads are OK, but so few of them seem worth the risk. I'm never that confident in any stock's short term direction. I wrote about one on T a few months back, did the trade, made money. >naked puts look real nice tho, esp. in this environment Call me crazy, I've more naked puts now than I have at any time this year. What I look for is a reasonable premium, a strike which is sufficiently OTM to get me 10% margin and an annualized return of 40% or better on the margin. One I'm considering: QQQ Jan 96 for $5.+ Since the stock is at 112, all strikes below 101 are eligible. The margin would be 11 the premium 5 for roughly six months. One I took: QQQ Dec 95 for 3 1/2. It's now 3 5/8 if you're interested. Another worth watching, APCC DEC 17 1/2 Puts for 1 1/8 or better. When APCC dips toward 20, as it does from time to time, the price of the put rises, I got 1 and 3 teenies with $2.00 margin for 5 months.