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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: Dan Duchardt who wrote (11650)	10/9/1999 3:19:00 PM
From: Casaubon	Respond to of 14162

Yes Dan, this is exactly the same as just playing the sideshows. It amounts to very well timed short term calendar spreads, using the call buyers premium on the long term covered call. I'm just now trying it out so I'll keep you informed. Although, my first option purchase was poorly timed. I will try the strategy on one position for about nine months and see how it goes.

To: Dan Duchardt who wrote (11650)	10/14/1999 7:13:00 PM
From: NateC	Respond to of 14162

You are right Dan. Why bother CCing at all. If you can predict stock movement by using BB's, RSI, MACD, etc......you'd make more money by being LONG Calls, than short. But, then, can we really do that. The last 2 months has taught me that technical analysis is both an art and a science....but in both senses, a very imperfect art and science. CCing gives some reasonable protection on the downside. I'm actually quite fond of Selling Naked Puts...as McMillan describes.....being essentially the same as being long the Stock, and short the CC....except with one less commission. Trouble is.....when your stock tanks.....and you are looking at Naked Put assignment...you need to cover your ____quickly....to avoid a big loss. Long and short is........you'll do well with any of these forms...as long as your TA is predictive.....and when it's not.....you have to have your back side covered. For me.....CC's are a little more comfortable of a cover for my backside...than the other techniques. As I've posted before.....I'm fond of the IBD technique....of closing any position that has more than an 8% loss

To: Dan Duchardt who wrote (11650)	10/15/1999 1:09:00 AM
From: Mike T.	Read Replies (2) \| Respond to of 14162

Dan, A bit of a delayed response to your augmentation of Casaubon's thoughts. I want to share an unfortunate error an acquaintance of mine had a couple of years ago, buying and selling naked options. He had parlayed a portfolio of around $5,000 into $75,000 in just under six months. He was following the market every day, and looking at early retirement. Then came the "correction" in the market (I believe it was around August of 1997). The VIX was crazy, and waiting for a correction. He lost everything. He was naked on all of his options, and did not have the capital to cover his short positions. He had far more market knowledge than I did (or do now, even with the free food I get from this thread), but I was long on all my positions, and felt pretty good about it. Investing is all about risk and reward. I have to be able to sleep at night, so I prefer long positions and covered calls. Anyway, I know we have different investment strategies, so I guess this is a "be careful" message. Mike