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

To: tyc:> who wrote (442)	5/7/2001 9:22:12 AM
From: Uncle Frank	Respond to of 5205

>> Surely there is very little difference between writing a put and buying a covered call. There are huge differences; even the underlying premises differ. I won't go into them since they are off topic for this thread, but until you can clearly distinguish between them, I'd recommend you do neither. uf

To: tyc:> who wrote (442)	5/7/2001 10:27:53 AM
From: BDR	Respond to of 5205

<<surely there is very little difference between writing a put and buying a covered call. >> If by "buying a covered call" you mean buying the stock and selling a call, then there is in theory very little difference. However, I have read and my casual observations suggest that premiums for puts usually are less than the premiums for calls so the reduced return may negate the increased efficiency of just selling puts. I don't know of any study that has quantified the difference. Many of us write covered calls because, as UF points out, many of us already are long stocks and are looking for additional income from those positions. Allow us our biases. Don't confuse us with facts.(g)