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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (43007)	3/4/2001 10:16:40 PM
From: Larry Ames	Respond to of 70976

Jerome, "The idea is not to sell at a loss, but if the hand (in stocks) that you are holding is going to take 10 years to see daylight its best to look around at a better universe of investments." Thanks for your thoughts on writing covered calls. I'm in the learning curve. It remains to be seen if I'm at the beginning or the end of this curve! Anyway, this is where I am in my thinking: As the stock drops in price this is -the stock you choose to write covered calls on is one you'd want to own whether your were writing CC's or not. -if you chase it down with covered calls, you're ahead of just holding by the amount of the call premiums. -if the stock recovers slowly and you continue writing CC's and replacing it as it's called out then you continue to accumulate CC premiums, perhaps in excees of just holding. -if the stock gaps up substantially while your net investments are in the hole ... this is the significant risk. Jerome, I appreciate your help, Larry