Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: John E. Deitering who wrote (11739)	10/24/1999 12:40:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 14162

John, I think you just graphically illustrated why Herm prefers to SELL options! :) If you prefer to buy them, my suggestions: 1. Buy only in-the-money options, typically 2 strikes in. 2. Don't plan on holding until expiration. When you have a profit, and there is still time value (ESPECIALLY true if you ignore (1) and trade out-of-the money options) TAKE YOUR PROFIT. If the option is at parity, though, you can go for a ride, but also consider a roll-up. 3. Stick to stocks that move, not ones that sit there. Be satisfied with small moves, which can still result in substantial percentage gains. If a stock move sup and down in a range every day, then your position will almost certainly be profitable at some point. Learn to sell when you have a profit. Learn to wait when you don't. Learn not to wait too long. :) 4. Stick to options that have good liquidity. For me, (3) and (4) are satisfied by sticking to popular tech stocks. Heck, you could trade nothing but Intel options. (And I'm sure there are those who do just that.) One final observations - options that are expensive are expensive are expensive for a good reason. And, as such, they can be a bargain. Every time I have had a really great win, I've felt the options were over-priced, and that the specialist beat me up on the spread coming and going. And, you know what, I just smile about those so-and-sos as I count my cash at the window. :)

To: John E. Deitering who wrote (11739)	10/24/1999 3:12:00 PM
From: NateC	Respond to of 14162

John....are you talking about BUYING Options...and hoping the stock moves in the right direction. or are you talking about Cov Calls?

To: John E. Deitering who wrote (11739)	10/24/1999 9:35:00 PM
From: Tom K.	Respond to of 14162

John, if you are really interested in "options," try selling OTM PUTs. Start with only a few contracts and only go out 30-60 days. Pick a quality issue.. suggest MSFT for a start. Once you get the feel and a taste for profits, albeit small ones, you'll be able to expand on the # of contracts you sell. If the issue gets put to you, turn around and sell CALLs. Starting rules: 1. don't be greedy (give plenty of cushion) 2. have funds to take the issue if PUT to you 3. only use quality stocks Follow these few steps and you'll start to make money with options..... at the same time, learn all you can about the process. Good luck. Tom

To: John E. Deitering who wrote (11739)	10/25/1999 9:59:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Hi John, Welcome to the forum! Thanks for your question. I do have a bias answer for you! What you indicated, "I have been trading unsuccessfully options" is music to our ears on this forum. Considering, we are the ones and others that are benefiting by your loses. The overwhelming number of options contracts expire worthless each month. :-) My suggestion is, why be the beaten down nail when you could easily become the heavy hammer? So, "hammer down" and join our profitable club. For starters, get my freebie WINs approach PowerPoint tutorial at webbindustries.com and the last freebie Excel template. Check out the free data and sign up for the freebie newsletter at coveredcalls.com. Sit back, and watch the money roll in John. Ask questions! We are here to help. Wishing you "best of good buys!"