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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: jaytee who wrote (13154)	8/16/2000 10:46:54 PM
From: Tom K.	Read Replies (1) \| Respond to of 14162

... what is your strategy in her acct?... Jaytee, The account has approximately $100K of GE stock. This gives me margin capability of the same amount. The objective is to send her a $1000 check each month. My approach is to always have more available in the account then is needed each month in case a trade doesn't work out. I still want to be able to send the monthly check. Yes, I do PUTs only on stocks that I wouldn't mind owning. For example, 10 contracts on the Sept 95 JDSU would bring in $1000 and would commit about half of the available margin for collateral. I might do another smaller trade with the balance of the margin to build up the excess. Always trying to be conservative because this is an income producing strategy, not a growth strategy..... don't want to risk the base. Just a simple way to give her some spending money while she won't part with the stock. If your question is why not sell CALLs on the GE stock, well each time I did that the stock took off and I had to chase it with roll ups so as not to lose the stock. Got tired of that. Besides, roll ups can be a cash drain. Hope that helps. Tom