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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: Herm who wrote (11693)	10/18/1999 10:01:00 PM
From: NateC	Respond to of 14162

Herm...thanks for the generous compliments. Actually I didn't do anything here that I didn't learn on this thread....or during about 15 return trips to McMillan, Trester, and Angell.....to clarify things. I'm also not sure I have the LEAPS calendar spread totally figured out yet....but yes, this one did work out OK....simply by selling a lot of volatility (SCH has been all over the place)...and then buying the expensive call back cheap....and rolling down. Since the LEAPS price doesn't move as much as the underlying (right now the 2001's have an unusually high Delta at .75).......You knock a lot of your nut each time you roll down......and although the underlying is tanking.....you are progressively getting a cheaper and cheaper long Call nut. Then....you have to know when to stop CCing....and let the long option ride up....with the underlying's recovery. (which is what I'm hoping for now with Schwab...and I have a year and 2 months to wait for it to do so) I don't usually leg in. (I would...but don't have the time.....in fact I usually get a fill on the LEAPS, then immediately CC it. ( I know Herm, it's not exactly WINS, but you do what you gotta do) Ameritrade now allows online Spreads...so I will try this eventually....kind of like a Buy-Write...using the stock substitute. hope this helps. still learning....so any "spreader", please comment