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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: Tom K. who wrote (11749)	10/25/1999 8:23:00 PM
From: Casaubon	Respond to of 14162

well then, I would say a there is a good chance that most of the 60% of those contracts that got closed were closed at a loss! Whereas writing an option can never lose money. The underlying can still lose money, but the written option cannot. Markets spend the majority of their time in a "non-trending" state. I don't have statistics but have read this a number of times from technical analysts (I believe Steve Nison and John Murphy but don't quote me). It therefore seems very intuitive to me to put ones money to work via a time decaying strategy. Selling time! Ha Ha HA! What a great concept. In my opinion, if one is not very good at technical analysis, backed up with some good hardware (direct access to trading servers. ie not online trading services) and software (realtime quotes and TA), one should not not risk but a small portion of their capital in option purchases. I have even become leary of buying puts to protect the downside risk, due to the time decay nature of options. I'm thinking a better strategy might just be to sell the underlying if the stock seems "overbought", and find another investment vehicle.