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Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: stomper who wrote (9445)	3/28/2000 9:02:00 AM
From: Percival 917	Read Replies (2) \| Respond to of 35685

Morning Dave, I don't think your premium is eroded at all. If a favorite stock gets called away and you have to buy it back at a higher price, you lose only 2/3 of the appreciation, not the premium. Remember what you are trying to accomplish here is a steady, consistent income to alleviate stress in your life. Let me give you an example. You have 200K in a stock. You bought a 2000 shares at 100/share. You write 20 contacts and get a 10% premium. You get 20K deposited in your account. At expiration the stock is now at say, 125/share and gets called away. Now you happen to like this stock and you buy it again putting your full 220K back in the stock. You would only be able to buy 1760 shares, yes, but if you get another 10% premium you now have 242K in your account. So your premium is intact and you are growing your account. I think you are looking at the fact that you can lose some of the upside appreciation, which is true but that doesn't erode a consistent 10% or so premium each month. I personally like not having to worry about the casino as much and know I have that consistent return. Is it as exciting as a stock that pops like Q last year? NO!! But I sleep better at night. JMHO, Joel