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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: JGoren who wrote (29)	4/19/2001 11:01:54 AM
From: Cooters	Respond to of 5205

J, I've been writing way OTM's and buying them back, as I've outlined on Buy Range. Started with Jan 200/220's, then Jan 155/160's, then Jan 120's, then only a few Oct 100's. Made anywhere from 3-6 each time, which pretty much reflects how far the stock has dropped. With the spin planned for early fall, I'm starting to shy away from another cycle. I'm much more confident of 2002 than the rest of this year, but I'd like to get back to 120's or higher. I still live more in fear of losing my QCOM than any concern over collecting premiums. That cult thing, ya know..... Cooters

To: JGoren who wrote (29)	4/19/2001 11:19:57 AM
From: FaultLine	Read Replies (2) \| Respond to of 5205

Going forward, it's hard to tell what's gonna happen. Those of us who own Qcom know how volatile it can be; therefore, I shall still sell way out of the money, especially because China contracts are expected to be announced in May and I don't want my stock called. I would have to expect Qcom to rise over the next few months. This is precisely the issue I am facing with the Q. McMillian suggests that you should not write CC's in the face of a bullish market. This really boils down to the issue of whether or not you are ready to have the underlying stock called. This is why I would suggest to beginners to develop the habit of always walking through (and writing down) the various possible scenarios before opening a new position. If you are ready and willing to let the stock go, then why not sell an in-the-money call with a hefty premium. This is a simple, low-risk, strategy with good downside protection for the overall stock+cc position, You pretty much bank your money and forget about it If one cannot bear the thought of parting with the stock for various reasons, then we have to be prepared to play out all the (sometimes distasteful) scenarios including taking a buy-back loss (just this one time, right?&ltg>). I personally have found myself more constrained by situations where I do not want the stock called. I've been trying to "think bearish" or think neutral and take the lower strikes and higher premiums. But now, with this market upturn I must be willing to let the stock go if I am reluctant to take the buy-back loss. Nice post, thanks for your contributions. --fl

To: JGoren who wrote (29)	4/20/2001 12:28:45 AM
From: surfbaron	Respond to of 5205

Jgoren: Thanks. Will probably wait for significant up swing, say 100-125, then sell cc's on a third. Then another third at 150-175. Then 200. My biggest mistake last time was believing that a pe of 150+ was sustainable. I don't care what the analasses say, I won't participate on such lofty PE's