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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (48667)7/3/2001 12:24:00 PM
From: BWAC  Respond to of 70976
 
<. Its impossible to lose money writing a covered call >

In concept of just the covered call option itself, you are right. But it is very possible to lose quite a lot of money in a covered call, IF the stock itself goes belly up.

Buy AMAT at $50, sell at the money near term covered call for $6. AMAT warns (hope not!) and opens at $30 the next morning. You gain 6, you lose 20. Granted that is just a snapshot moment in time. AMAT the stock may in fact recover. But therein lies your risk in a covered call.



To: Jerome who wrote (48667)7/3/2001 12:29:47 PM
From: Kirk ©  Read Replies (1) | Respond to of 70976
 
Settle down Jerome

"trade options" is FAR DIFFERNET than "wriing covered calls" as you should be well aware.

The WHOLE POINT of the discussion was people were complaining about ONLY being allowed to write covered calls.

When people object strongly, sometimes what is being said has a ring of truth to it, eh? Do YOU still disagree with what I wrote?

regards
Kirk out


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