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

To: FaultLine who wrote (1033)	6/11/2001 9:44:01 PM
From: hivemind	Respond to of 5205

Yes indeed. ITM short puts having common go above strike is max profit, same as buy-write. You are taking an aggressive bullish position. If you sell way ITM puts you get very little time value; nearly identical to buy-write with way OTM short calls. both positions are very close to long stock alone, except for that teeny preemie. Note reminder: At parity, calls with always sell for more than puts. This has to do with interest rates which are pretty low now. In theory one wants to earn money market rates on the cash collateral securing the puts. Or hold t-bills to same effect over life of position.

To: FaultLine who wrote (1033)	6/14/2001 6:52:42 AM
From: Pat W.	Read Replies (1) \| Respond to of 5205

I have a question regarding longer term CCs. I realize the rate of return is better writing shorter term CCs, but I have some smaller accounts that I do not have time to manage actively (my full time job interferes). I am thinking of writing some longer term options with low call prices (for relative safety) that could just sit. A couple of examples, based on yesterday's prices: using QCOM at 54.22 on 6/13 1-sell jan'02 50 at 14.2 if exercised, annualized rate of return 46% 2-sell jan'02 40 at 19.9 if exercised, annualized rate of return 30% 3-sell jan'02 35 at 23.1 if exercised, annualized rate of return 22% 4-sell jan 03 40 at 25 if exercised, annualized rate of return 20% Using SEBL: sell jan 03 35 at 20 if exercised, annualized rate of return 23% Comments/criticisms would be appreciated.