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To: Road Walker who wrote (137991)	6/22/2001 9:42:01 PM
From: Elmer	Respond to of 186894

Re: "For that matter, you could write July at the money 27.50's, for $1.65, or 6%, for less than one month. Theoretically, if you sell at the money calls with a 6% premium and get called out each month, your compounded return would be 90% at the end of one year (minus commissions and short term cap gains tax)." In this situation you'd be better off writing puts at $27.5. About $1.50 premium and no money out of pocket. No? Re:"There are two downsides to writting calls as an ongoing strategy. The first is the opportunity cost if the stock goes up a lot." This is a given but I see a difference between risk of losing and risk of not making as much. Re: "The second is if the stock goes down a lot, yes you collect the premium, but the next month when you go to sell calls, you may be selling at 6%, but it is 6% of a much smaller gross dollar amount. And the stock can continue down." I see less risk compared to just buy and hold, if you don't write calls below the original price. Re: "Selling covered calls is a good conservative strategy, but not without risk. Just as owning stock isn't without risk, as we all know too well." Some of us on this thread are trying to get rich. Some are trying to stay rich and some of us are trying to get richer. This is a better strategy for the latter two. EP