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

To: FaultLine who wrote (449)	5/7/2001 3:10:47 PM
From: JohnM	Read Replies (2) \| Respond to of 5205

FL, I read Thomsett's book, Getting Started in Options yesterday except for Ch. 7 "Selling Puts" (speak of the devil),and Ch.8 "Combination Techniques. Glad to see someone had the time. I promised to read it and post a response; still doing the reading. Found better things to do with my weekend than read options books (g). But I'm finding Thomsett far and away the best of the several beginniners books I've read. Only about a third of the way through yet. John

To: FaultLine who wrote (449)	5/7/2001 3:26:27 PM
From: BDR	Read Replies (1) \| Respond to of 5205

I may be giving away too much about my cost basis, but if I followed Rule #1 I wouldn't be writing calls on most of my portfolio at this time. :( 1. Setting up the call write so that, if exercised, you end up losing money in the underlying stock. This is possible if you sell calls with striking prices below your original basis in the stock....

To: FaultLine who wrote (449)	5/8/2001 1:03:14 PM
From: TimF	Respond to of 5205

"1. Setting up the call write so that, if exercised, you end up losing money in the underlying stock. This is possible if you sell calls with striking prices below your original basis in the stock.... Doing this might make sense. If you don't think the stock will go back to your purchase price any time soon. You might get a net loss when you get called out, but you at least get the premium plus extra for the underlying assuming you sold an OTM call. You get more then if you just sold the stock instead of writing the call. Of course if you are so certain that the stock wont recover maybe you should just sell it as it could obviously continue to go down. Tim