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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: Sam2482 who wrote (11985)	12/2/1999 8:14:00 PM
From: Herm	Read Replies (2) \| Respond to of 14162

Vicki, 1. The leaps need to be out at least a year and don't hold them within six months of expiration. You are better off going out two years and give yourself plenty of time. It's cheap ownership of the stock! 2. Sell the CC at least one strike price out from the LEAP. That is only true IF the stock price has risen above your entry point in the LEAPs. The formula would be your LEAP strike price + your cost for the LEAP = B.E. for the spread. You would need to exceedd the B.E. So, a strike of $30 + $4 for the LEAP = $34 B.E. and you would need to sell at or above a $35 CC strike price. Going out three or six months on the CCs should always take care of that problem. Remember, if the stock drops and the CC become super cheap you will ALWAYS cover (if you can keep 75% or more) and repeat the WINs process. Fairly, easy process and easy money.

To: Sam2482 who wrote (11985)	12/5/1999 5:20:00 PM
From: NateC	Read Replies (1) \| Respond to of 14162

You got the main parts Vicki. you might add to this Buy the long LEAPS call significantly UNDER value and look for Covered Calls that are at least near their intrinsic value....that way you can SELL time more rapidly Also......yes....you do want sold uptrending stocks....HOWEVER.....if you get a downtrender.....try buying back your current covered call.....and selling another one (roll down) several months in a row during a downtrend. You'll be surprised what happens to your long LEAPS call Nut. You can whack away at it pretty soon....and eat away all the intrinsic...and part of the time value...