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

To: Alias Shrugged who wrote (1685)	7/31/2001 7:36:51 AM
From: 100cfm	Read Replies (1) \| Respond to of 5205

Mike Of course you are right technically speaking. But we do align ourselves with the shorts in that once we sell CCs we don't want the stock going up but we don't want it going down too much either since we own the stock.LOL! We don't ask for much do we. If was easy, everyone would be doing it not just us dummies. 100

To: Alias Shrugged who wrote (1685)	7/31/2001 9:45:56 AM
From: William	Read Replies (1) \| Respond to of 5205

Mike >>I choose calls which are ATM or slightly OTM for usually the maximum time allowable. << Why do you pick the maximum time allowable? I usually do just the opposite, write the front month. The further out in time you go, the less is known about what the market will be doing, the smallest dollars per day decay, and the most time your assets are locked up. So could you explain for us why you go to max time? Thanks. William

To: Alias Shrugged who wrote (1685)	7/31/2001 11:14:30 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

When I write covered calls, I choose calls which are ATM or slightly OTM for usually the maximum time allowable. The critical decision is choosing a stock which you think has bottomed, since, as stated above, one is basically shorting puts naked when doing buy/writes. Your comments highlight the differing considerations between buy/write versus writing calls against long term positions. I'd note, however, that your approach to buy/write differs from what I have seen as typical, ie writing the front month call with the expectation of getting called so as to realize a handsome short term return. When writing the max time call, aren't you concerned about getting "trapped" into a synthetic long term position by a down market? duf