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

To: FaultLine who wrote (506)	5/10/2001 2:16:34 PM
From: BDR	Read Replies (1) \| Respond to of 5205

<<So I guess I am claiming that the current basis must always enter into one’s strategy considerations. >> Are you saying that you would never write a call with a strike price below your basis? Is that because if it were exercised, you would have to take a loss? I am with dUF on this one, I think. I can't change what I paid for a stock in the past. I can't set the price for the stock in the future. All I have got to work with is today's market price.

To: FaultLine who wrote (506)	5/10/2001 3:22:10 PM
From: Mathemagician	Read Replies (1) \| Respond to of 5205

So I guess I am claiming that the current basis must always enter into one’s strategy considerations. How do you folks think about and handle this issue? With the exception of tax consequences, I leave the past where it belongs - in the past. I find it much more beneficial to focus on improving my current situation. My goal is for my portfolio to have more value in the future than it has now. I find that nostalgia over the prices of long ago clouds my judgement and causes me to hang on too long to an unprofitable investment, as well as causing me to miss opportunities. If I believe an investment will be profitable, I will maintain/increase my stake. If I believe it will go down, I will reduce/eliminate my exposure. The future performance of my current portfolio is independent of my cost basis. dM

To: FaultLine who wrote (506)	5/10/2001 4:44:32 PM
From: Judith Williams	Respond to of 5205

dfl current basis must always enter into.... I pay a lot of attention to basis when the options are in a taxable account. Otherwise, I ignore it. Also, I use TA differently depending on whether the account is taxable or not. For positions I've held a long time and have a low basis, I tend to be quite conservative when doing cc's on the taxable side and cover at the second level of resistance. If the stock has had a run and is in a non-taxable account I often sell ATM or at just one level of resistance away. djw