Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Uncle Frank who wrote (205)	4/24/2001 3:03:22 PM
From: Getch	Read Replies (1) \| Respond to of 5205

UF - the key to return is when do you receive/spend the money. You spent $20 to buy the stock, and (presumably) immediately turned around and write the call for $10. Net out of pocket from these together transactions = $10. At expiration, if called, sell stock for $20. 100% return (if it were only so easy).

To: Uncle Frank who wrote (205)	4/24/2001 3:04:51 PM
From: Dr. Id	Respond to of 5205

But as I see it, I started off spending $20 to buy the stock in the first place, and since I ended up with $30 after selling the stock, I'm 50% to the good. I wonder if there is a GAAP to guide us? duf Isn't this just quibbling over statistics? The way I see it, you risk and wind up with the same amount of money whether you see it as a 100% gain or a 50% gain. I guess seeing it as a 100% gain feels better... Dr.Id@anygainwouldfeelbetterthanwhatwevebeenthrough.pov