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To: RocketMan who wrote (29967)	8/21/2000 2:06:07 PM
From: Mannie	Read Replies (1) \| Respond to of 35685

Rocket, I had a bit of a hard time following your example completely. But I think you created a tailor made example that may be misleadingly negative. In October I think you have yourself buying shares that you already own, that you didn't get called out of. Anyway, I can only tell you that I find that month over month I am getting an average return of about 8.5%, that is substantial in my book. I believe you have said that you like buy and hold gorilla stocks, I do too, half of portfolio is in them, uncovered. But my point is, if you are comfortable in those stock for the long haul, you can use those same stocks at CC vehicles. So if you are comfortable just holding them, you should be really comfortable getting the premiums as insurance and/or income. Scott

To: RocketMan who wrote (29967)	8/21/2000 2:26:57 PM
From: Jill	Read Replies (1) \| Respond to of 35685

RM, maybe somebody already answered, but what you're looking for is percentage return, and how many shares you need to buy-write to get a fixed monthly income. If you want $500 next month you don't have to buy 1,000 shares at a higher price. You are still getting 10% on your bulk of money. Sometimes it might be 900 shares sometimes it might be 1200 shares. But percentage return is what you're looking at.

To: RocketMan who wrote (29967)	8/21/2000 2:51:14 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 35685

>> The problem is that during months when the stock goes down... Imo, CCs are not a good strategy for a trader. If you aren't committed to a lt position in a specific stock, it is best avoided. >> The fatal flaw is that during months when the stock goes up, one gets called and the gains are capped. In a taxable account, the name of the game is never to be called out. Instead, buy back the call, take the short term cap loss, and retain the profit in the underlying position. >> Maybe this is why McMillan says that CCs are used when one is slightly bullish, or at worse neutral on the stock. Well thought out LT positions are always based on bullish presumptions. Therefore, the volatility of the base position can be ignored. But the key is to recognize that CCs are an income producing rather than wealth building exercise. I'd suggest you transition from a theoretical analysis to paper trading CCs around some of your long term positions. uf