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: Tim Lumley who wrote (12105)	12/23/1999 10:35:00 PM
From: Tom K.	Respond to of 14162

...Do you define your base as your total exposure in the trade, i.e. 100% of the value of the underlying equity, or do you define it to be the 20% of the underlying equity margin requirement for a naked put?... Actually Tim, it is neither. My approach is really simple. If I have a $100K cash base, I strive to generate enough premiums to exceed a 30% annualized return on the base, not against an individual trade. My target on a base of this size would be to exceed $2500/month. Depending on how I feel about particular issues, I may do more contracts on one and less on another. I monitor the total premiums received against the base for the month. My objective is income generation. Hope that helps. Tom