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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: JGoren who wrote (13595)	2/6/2001 12:18:28 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 14162

My decision making is simplified since I'm selling cc's in a sheltered account. Unless the stock goes straight up, which I don't think can happen in today's environment, I can always re-establish my position on one of the too frequent dips. >> I think qcom could make another runup if China contracts let or it becomes obvious to the market that NOK is folding. Writing March, April and May calls has major risk. I let a year of cc revenue slip away using that kind of logic. Maybe the trick is to avoid selling near to the money front month options, and instead write 2nd month >15% otms. As an example, the bid on April 110s is $3.25. If they got called, we'd have a return of $16.81 or 19.4% in 10 weeks. That would be a great annual return if we managed to avoid getting called and did it 3 or 4 times this year... >> BTW, my basis is a lot lower than Uncle Frank's Well deserved, too. You were very patient. I did pretty good for a latecomer, though :-). uf