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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 (12125)	12/29/1999 10:39:00 PM
From: Jeff Meek	Read Replies (2) \| Respond to of 14162

Your broker's requirement of 20% of the underlying seems very low. Most require 50 to 100%. With 20% margin, do you write puts covering your full account size? i.e. with a $100k account, do you really write puts for $500k of stock (if all the puts were suddenly assigned)? Or am I misunderstanding Brown's NP margin policy? With a higher NP margin broker, OTM put spreads can allow a better use of capital. Most brokers (if they allow put spreads) will only require margin for the difference between the strikes minus the credit. Bull put spreads also cover your backside in case the stock pulls a surprise tank-a-roo. I totally agree with Tom and OX that the 3 most important factors of NP selling or put spreads are: 1) the stock, 2) the stock and 3) the stock. hpeace had a number of good posts on bull put spreads on this thread. They were from a long time back (in internet terms), around post 3000 or so. 3 days ago I sold 10 QCOM 320 LEAPs and today they are up $14,000" I decided not to touch QCOM when it was at 300. After a huge rise to 300, betting on a further increase seemed to be risky. 250 points later...ain't hindsight grand. Oh well. Every time I look at the QCOM chart, I think about musical chairs and all the suckers that will fall on their ass when the music stops. In the meantime, cha-cha-cha. Sorry about the QCOM rant. I had to get that off my chest :-)