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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 (11818)	11/15/1999 5:06:00 PM
From: virgil vancleave	Read Replies (1) \| Respond to of 14162

WOW, it looks like I am back to the drawing board again. I took my profits on cell and zolt today. Sold cell for around 10 and bought at 7 three weeks ago. Glad I did not sell any calls. Zolt I bought 2 weeks ago, but did not sell calls since they had little premium. Sold today on the rally. Nice near 50 percent moves for both since I bought them. I sold because I just have a bearish feeling for the market now. My reasoning: past trends and experience. We are past earnings for most companies and they were strong which will make it even harder to keep the growth going at the present rates. Just look at the reversal in qcom today. Late november and into december is earnings prewarnings season and this year the y2k problem, which I don't think is a big deal. I am not sure what I will do for sure, but I am now over 50% cash with my only long position brkt a sure called position on friday since I sold nov 12.5 calls. anyway, I will keep posting and use links for my picks. I also read this thread every day when I am in port since it also gives me ideas and the coveredcall.com site, which is an excellent source of ideas also. good luck

To: Herm who wrote (11818)	11/15/1999 8:04:00 PM
From: StaggerLee	Read Replies (3) \| Respond to of 14162

Herm, I've enjoyed reading your postings here on the covered call thread. I've been using a simple CC strategy for a few months and getting about 7%-10% per month in premiums (without margin). Each month I start over, putting about 15% or my portfolio into each stock/CC position. If one of the stocks tanks by mid-month, I buy the calls back cheap and sell a lower strike to minimize the damage. So far it's worked like a charm, but my stock picks have performed much better than I can expect long term. (i.e., I'm getting called out 80% of the time or so). I'm wondering if this 7-10% per month thing is too good to be true. I always believed that options are a zero-sum game, whereby on each side of an option there is a winner and a loser, and the gains/losses offset perfectly. Over the long run, shouldn't you expect that the gains realized on CC premiums will be wiped out by the occasional massive crash in your underlying stock(s)? I would think the implied volatility used in pricing the option would guarantee that over time, the premiums would be offset exactly by losses. In that case, all you're really doing is generating brokerage commissions. I've read all kinds of things about options, and heard a lot of hype...I even have a spreadsheet showing how I'm going to be worth $10.7 million in 4 years at the pace I'm growing <g>. Do you know of anyone who has been able to get 10-20%/month consistently over a long period of time? I'm wondering if I'm getting too excited over the possibilities here, or if this is in fact the road to riches...