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

To: JohnM who wrote (719)	5/21/2001 5:03:27 PM
From: FaultLine	Read Replies (2) \| Respond to of 5205

What I was saying John is that you'll always get the best premiums from wildly optimistic buyers. Even though you are thinking up and down in a trading range, they are coming out of the woodwork to jump on the bandwagon as the stock price starts running up. The premiums get fatter and fatter as the climb continues -- they all know this is the big one. (Yeah right...) The buyer buys your expensive "sure thing" contracts near the premium peak but then realizes an hour, a day, a week later that this was not such a great idea. We want to be contrary and sell into this unbridled optimism. I used to be a perma-bull myself. I lost a lot of money by always deluding myself that "this baby is gonna go up so buy a call." I must admit that that was during one of the worst Bear markets in history. Haven't really played in a Bull market yet. I was too pessimistic this morning and sold my QCOM JUN 70's too soon -- I thought the rally was about done but it was not. --dfl