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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: NateC who wrote (11678)10/17/1999 1:08:00 AM
From: NateC  Respond to of 14162
 
BTW.....anyone else that may be interested in CCing long LEAPS calls (as stock surrogate) (particularly those of you who weren't on the thread back then) should go back to post # 9972. Dick Hickman reminded me of this one.....which gets to the heart of this strategy.

basically....you can't let your CC get exercised, as you need to continue collecting premie to reduce the nut on your long LEAPS call. If you have an underlying that doesn't move up too rapidly....you can really knock the price of your long call down rapidly. Remember to buy one that's OUT there....right now...definitely Jan 2002....because once you get inside the 6 month mark...the time premium really erodes quickly



To: NateC who wrote (11678)10/17/1999 5:06:00 PM
From: Tom K.  Respond to of 14162
 
Nate...that really was an old message.

I only used the approach one time and in the end closed out the position. I'm actually not real comfortable with CCing and that was a key part of the strategy. So I've gone back to doing short term PUTs for income.

Tom


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