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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Mannie who wrote (32768)	3/8/2001 2:10:42 PM
From: edamo	Respond to of 65232

scott..."buy/write" can be a very lucrative strategy, especially in a neutral to up trending market....higher risk is incurred in a down trending market when the potential of capital depreciation is greater then the premium collected...voltaires "easy money" extr mar 35 buy/write at 31 has proven to be not so easy, about 20% under including premium offset..... if you are going to do it and limit risk best to find a technically stable stock.... not necessary to always set positions, sometimes better to let opportunity come to you... good luck and congrats on weathering the storm... ed a.

To: Mannie who wrote (32768)	3/8/2001 7:29:18 PM
From: FR1	Read Replies (1) \| Respond to of 65232

Scott - I don't understand how you could make money during the last year with buy/write. Especially with msft, csco, emc, qcom. It seems to me that if you bought the stocks and wrote covered calls you would lose your shirt because the covered stock would drop like a rock and go down much further than your premium. You also would be obligated to hold the security unless you bought back the call. It seems to me that the strategy might work in a downtrending market if you bought the stock, intended to hold it long, sold calls and bought protective puts. The calls would probably pay for the protective puts and you could ride the down elevator almost for free (or at least until expiration date). How did you make money doing buy/write?