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

To: alanrs who wrote (1240)	6/27/2001 6:40:07 PM
From: alanrs	Respond to of 5205

To expand on really liking this game, I am coming up on 1 year of calls, and am still viewing it as a learning experience. Without too much effort I have earned 10% on my entire portfolio, while only having a maximum of 20% of the portfolio involved, and then only about 25% of the time. Very little of this has been buy/write-just working with the junk I happened to own. I am selling another condo and planning on putting a portion of the proceeds into an account for the sole purpose of options strategies. I want to thank all the people who post here. I am constantly amazed at the variety options allow. This thread is my first read, and I've saved quite a few posts regarding approaches, which I hope to digest further. Thanks again. ARS

To: alanrs who wrote (1240)	6/30/2001 2:38:21 AM
From: Uncle Frank	Read Replies (2) \| Respond to of 5205

>> As premiums came down over the last 3-6 months or so I have gone to the 3-4 month area for exactly the above reason. Since I typically write 1-3 contracts at a time, I need a larger premium in absolute dollar terms for CC's to make sense and often cannot get that with nearer term OTM calls. The seemingly fat premiums make it tempting to write 3-4 month expiry calls, but are they really that juicy? Since time premium varies in proportion to the square root of the time remaining on a call option, you only get twice as much for a 4 month call as you would have for a 1 month call, or to put it another way, the "rent" per month is only half as much. I just went through the math comparing the time premium for qcom jan02 calls versus jan04 leaps on the g&k thread, and cross post it for general review: Message 16016571 >> The one big advantage to this is that I have had ample opportunity to buy the calls back at very good prices without worrying too much if the stock spends some time above the strike price. The problem as I see it is that dips in the price of the underlying don't affect a cc with 3-4 months remaining on it very much. To my way of thinking, the danger of the stock "getting away" from you (going deep itm) is much greater on long calls. That's why I've stuck with front monthers. jmho, uf