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

To: Dr. Id who wrote (471)	5/8/2001 12:48:12 AM
From: Mike Buckley	Respond to of 5205

Id, There have been several posts recently explaining the need to have extra cash in order to fully implement certain covered call strategies in certain situations. The most recent of those posts: Message 15767737 --Mike Buckley

To: Dr. Id who wrote (471)	5/8/2001 2:26:41 AM
From: FaultLine	Read Replies (1) \| Respond to of 5205

Selling covered calls requires no tieing up of capital. Not exactly correct. Last month I got into a situation where I was right at a margin call. At that time, I realized that I could not buy-to-close ANY of my outstanding covered calls unless I transferred additional capital or sold something. Almost everything in my portfolio was covered (except for a few hundred shares of NTAP) so I was extremely limited in my ability to sell securities from my portfolio to generate the necessary cash. I sold the NTAP, my only possible immediate choice, and produced sufficient cash to unwind a couple of cc positions that very day. I had not fully realized what a cash bind you can get into when attampting to unwind a cc. Live and learn, --fl