Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: dday who wrote (898)	6/4/2001 11:24:57 AM
From: adairm	Read Replies (2) \| Respond to of 5205

Thanks for the reply. Yep. I had thought about setting a stop on the underlying. If it gets hit, then the call should be practically worthless, so it should be easy to buy back. A question: A lot of brokers will not allow naked call writing. In this situation, where you've opened a buy/write, and now you sell the underlying, you're in a naked call situation! Unlikely that you will be called, but if the account prohibits naked call writing, it might prevent the stop loss order from executing. (I activated naked call writing in my ML account for this very reason. I have no intentions on writing pure naked calls.) Does anyone know how ETrade would handle this? I know they prohibit naked call writing. Another option (pardon the pun) is to buy a cheap put for downside protection. This would lower your returns, but may allow me to sleep at night. Adairm