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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: Hectorite who wrote (11503)	9/9/1999 10:06:00 AM
From: Michael Hart	Read Replies (1) \| Respond to of 14162

Hectorite, Thnx for responding. I also am income oriented and use CC's to generate income almost exclusively. In regards to your question as to my selling in the money calls when the stock was at 12 when I wanted to keep the shares. My primary goal is to generate income from the shares and secondarily to hold onto them as I would have to take a large gain if called. I tend to sell CC's on them into the next tax year also for this reason. I know the company well and decided that at that time the run up from $7 to $12 would create a pull back to 10 or so because earnings were due in a few weeks. Not only would in the money give me some room to profit on a pull back but there was about a 20% premium in the calls as well which looked pretty good for the next 7 months if I happened to get called out. I continued to like the position even though there were a couple of pull backs during the summer. Recently the stock seems to be basing with a low of about 15 instead of the 10 I based my original decision on. I feel like I'd be leaving money on the table if I just let the position go to experation. So my choices seem to be take a little ( my judgement ) more risk and get more profit by upping my strike price or let the existing low/no risk position expire. I'm just not that confident in what all the ramifications are when moving up in strike price. ie. should I also move the experation date out ? In any case I appreciate your response and wish you the best of luck, Mike