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

To: BDR who wrote (348)	4/30/2001 10:36:28 PM
From: BDR	Read Replies (1) \| Respond to of 5205

Am I allowed to critique my own transactions?(g) Browsing through the end of day stock and option quotes and playing with the yield calculator I see that I could have gotten an 8.95% yield buying SEBL at the close and selling the June 40 Calls at the bid. 8.95% for 46 days is almost as good as 3.58% for 18 days. Six decisions and sets of commissions a year instead of twelve. I didn't check the yield for the August 40s, but I will run all the combinations next time.

To: BDR who wrote (348)	4/30/2001 11:20:22 PM
From: FaultLine	Respond to of 5205

Frank and thread Frankenthread...?

To: BDR who wrote (348)	5/1/2001 2:43:20 AM
From: Uncle Frank	Respond to of 5205

>> I am trading the low probability of a higher return with an OTM call for a higher probability of a lower return with an ITM call and getting better protection of capital. Excellent, Dale. This will be a great demonstration of a conservative way to achieve outstanding returns in almost any market. duf

To: BDR who wrote (348)	5/3/2001 5:42:58 PM
From: FaultLine	Respond to of 5205

Executed a buy/write on SEBL JUN 47.50's today. I do not mind being called on this position. The only expectation I have is that, at expiration, the price will be above my break even and most likely about $46 although the upside above the strike is not important. Commissions are 3 cents per share and 8.00 per contract and are not in the calculations shown here. Bought SEBL @ 46.14 Sold SEBL JUN 47.50 Calls @ 5.00 (ALL Time Premium <g>) NetInvestment = 46.14 - 5.00 = 41.14 StockGainAtStrike = 47.50 - 46.14 = 1.36 MaxReturn = 5.00 + 1.36 = 6.36 Days = Expiry - Today =44 MaxReturnPerDayPerContract = 100(6.36 / 44) = 14.60 MaxReturnOnInvestment= 6.36 / 41.14 = 15.46% ( good, it's > 10%/mo) BreakEven = 46.14 - 5.00 = 41.14 DownsideProtection% = 5.00 / 46.14 = 10.9% (good) --fl