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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: Richard Gibbons who wrote (11901)	11/25/1999 5:39:00 PM
From: Ken Adams	Read Replies (1) \| Respond to of 14162

Hi Richard, I think I mostly agree with your assessment. I think the idea of writing calls works best (at least is has for me) if you own a stock that is in a longer term rising trend, don't mind being called out and want to add to the value of your account by doing so. It seems to me that the ideal methodology on this thread calls for some pretty nimble timing (something I believe can be done some of the time). If you can catch this rising stock at a time it is just beginning a minor correction, this should be an opportunity to capture the best premium by selling a call. It would also help guard against being called. Of course, selling a distant ATM would bring nice premiums and they could be bought back in a short time, again with nimble timing, at a fraction of what you sold for. If the stock fails to hold at the lower BB, or otherwise breaks support, then a sell decision must be faced. The money from the sale of the calls may offset any loss here, or minimize it, at the least. At that point, what one does with the profits (if any) from that move is up to the individual. There are many opportunities. Further, it seems to me that this idea might work best if a trader were to get intimately acquainted with a few trending optionable stocks and "sleep" with them. Know their every probable move and be ready to take profitable advantage of that move. I completely agree that no one should be selling puts on a stock that he/she expects to go down. I don't see the above concept as the equivalent. Ken Adams