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

To: FaultLine who wrote (707)	5/21/2001 2:19:39 PM
From: Tom Chwojko-Frank	Read Replies (1) \| Respond to of 5205

I am amazed at how fast the premiums start dropping at the slightest hint of a slowing, leveling, or downturn. Isn't that why they're called derivatives? <g> Tom CF

To: FaultLine who wrote (707)	5/21/2001 2:59:35 PM
From: JohnM	Read Replies (1) \| Respond to of 5205

The real trick is to sell when you predict the buying surge is past but the buyers still think the surge has legs. I've been watching the up's and down's closely the past few weeks and I am amazed at how fast the premiums start dropping at the slightest hint of a slowing, leveling, or downturn. Great thought but the reverse logic of covered calls still throws me. I have to think about each step before taking it. Right now I'm looking at the NUFO issue in which since I don't mind being called out, it makes sense to simply take the premium and the profits from the stock sale. But, just as I say that, I remember I have to worry about a sharp drop which leave me with pricey shares. Didn't realize there was so much short term fun in a sleeper of a market. John