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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 (882)	6/1/2001 12:02:43 PM
From: i-node	Respond to of 5205

I wonder if this is a good argument for selling calls further out than most of us have. For the most part, we have been selling calls for the current month or the month after that. I wonder if it's a safer play for the call writer to write calls much further out (say Jan AOL calls rather than July AOL calls) with the plan to cover much sooner than January. Until recently I had maintained the attitude, "I want to own the stock, so I don't want to get called". I don't feel that way anymore -- I'm picking a strike price that will make me happy to get called. Frequently you get to cover anyway, and if you don't, you can just wait and buy the stock back on a dip. Besides, there is the option to roll up and out as expiration nears. Jeez, if you get called, it seems there are plenty of other stocks out there... At this point, I'm selling Jun-Jul & Aug at the latest, and trying to sell when they're at least a little ITM. This seems to give the best opportunity to roll up and out if that proves beneficial or buy back for cheap in a short period of time; I'm still operating on a learner's permit, but so far, seem to be doing pretty well with it...