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

To: William who wrote (1331)	7/5/2001 2:43:16 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

PLEASE PLEASE understand how the game works and what the rules are before playing. Don't buy or sell options until you understand what you are doing. You are given a booklet and have to say that you have read it and understand it before anyone will open an option trading account for you. READ THE Field MANUAL!!! That's worth repeating. Maybe it should go into the thread header. The only point we disagree on is your ascribing any educational value to that booklet. Imo the only purpose of that pamphlet is to shield our brokers from law suits. I didn't find it of any help in clarifying the complex processes of trading derivatives when I was a newbie. Come to think of it, I still am. Great post, William. uf

To: William who wrote (1331)	7/5/2001 8:05:57 AM
From: Eric Berry	Read Replies (3) \| Respond to of 5205

WIlliam, I'll be the first to admit that buying 1 measly option for 65 bucks was not the best move, but again, I was trying to start really, really small. Please tell me if I've got this scenario right: 1. I buy 200 shares of GX @ 9.62 = 1924 + 12 (commission) for $1936 2. I write 2 AUG 10 calls @ 1.25 = 250 - 30 (commission) for $220 If not assigned, I make $220, and have 200 shares of stock. If assigned I sell 200 shares for $2000 - $45 Assignment fee - $30 Commission to close option - $12 Commission on stock = 1913 (for a loss of $23 + my $220 premium)?? To be honest, I was really interested in long term LEAPS, but since at this point, I've only been approved for Level I trading, I thought I would try this first..... Thanks again for all your help..... Eric