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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: Herm who wrote (12896)	6/5/2000 2:35:00 PM
From: cowboyfan	Read Replies (1) \| Respond to of 14162

Herm, I have followed George Fontanills for a number of years and he is very sharp imo. The question I have for you is that George strongly advises against selling covered calls due to too much risks involved. George has told me numerous times that a Bull Put Credit spread is a much better trade than covered calls because your downside is limited and you can still capture the premium. I'd like to hear your opinion )or anyone else's) in this regard.

To: Herm who wrote (12896)	6/5/2000 8:12:00 PM
From: virgil vancleave	Read Replies (2) \| Respond to of 14162

Hi herm and all: We have a great thread here. I hope everyone is still maintaining profitability during this whipsawing market. Actually, I posted a week or so ago that we should see a recovery based on what I read in the charts and overall market. That being said, I covered my short positions (I don't usually cover my shorts with puts since stocks fall too fast and I would most likely limit my profits), and went long..... on margin. Last friday, I closed my gold position in pdg (early since another day would have made me more $), and today sold the rest of my long positions. That being said, I am 100% in cash and will be researching for some buying/selling opportunities. I decided not to sell calls for 2 reasons during the past 2 weeks. 1) The calls on pdg and hdd were not very high in premiums and atms did not sell calls and 2) I am still thinking that what we are seeing may well be a short covering rally in the beginnings of a bear market. My reasoning for #2.... look at oil and gold and some other commodities. It is called inflation. The other part of the concern is the low put to call ratio and the increasing margin debt (again). Seems to be alot of greed in the market at present. But then again, who knows, I sure don't and I might be wrong here. Todays market action showed another day of distribution even though the averages finished slightly higher. The market reversed in midday and closed near breakeven, a bad sign. Thus, it may well again be a good time to look for short candidates or sell some atm or itm calls on stocks I like that have good call premiums. But then again, I am now up my goal of greater than 10% for this month and may just take a few days off from the market. Most of my good covered cal candidates have went back up again, meaning I need to do some homework to look for candidates(new). I like the looks of clzr at 10, sdrc at 11 1/16, ment looks good but just made a new high today, nsta at less than 15, digi at 5, tgx at 8 1/2. I will get back in hdd if it falls back to anywhere below 11 and trade it for the fifth time. For golds, I like pdg at 8 1/4 or less, and hm <6, and lastly glg at <2. These are just my opinions here and hopefully everyone does some research of their own if they use any of my ideas. Many of these have good call premiums, but also have excellent fundamental valuations. good luck