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

To: Uncle Frank who wrote (1854)	8/9/2001 2:13:14 PM
From: PAL	Respond to of 5205

My concern about the buy-write approach is that it seems to focus on stocks with the highest premiums rather than stocks with the highest prospects. you are quite right, Frank. When element of greed enters the picture (which is frequent and very easy - been there done that), disaster follows. Human nature makes a person reluctant to admit that he/she makes a mistakes, hence seldom to take a small loss at the expense of a huge one. Of course my old man always says that the worst lie is lying toyourself. One knows it is wrong not to take the loss, but keeps denying. :-( I know the thread is about covered call. That means using your security as coverage. The objective is to get additional return. This is not about trading options like diagonal spread, bull spread, buttefly etc. All those fancy names are beyond me and probably should be in a different forum. I feel that the return can be enhanced by writing a "covered strangle". >> have the capacity to take assignment. That's never an issue for covered call writers. the assignment is on the put, i.e. when the stock is traded below the strike price and get assigned, one should have the cash to pay for it instead of margin. you remember that margin killed the market and take many people to the poor house. best to you paul

To: Uncle Frank who wrote (1854)	8/9/2001 5:36:36 PM
From: Road Walker	Read Replies (1) \| Respond to of 5205

UF, re: This original thrust of this thread was to discuss covered call plays that long term investors could safely employ to generate an income stream from their core holdings. But as membership has expanded the range of interest has expanded to include buy-write, shorting puts, spreads, writing naked calls, etc. The pattern is reminiscent of another thread, Gorilla and King Options, that drifted from conservative origins to become a virtual casino and a social disaster :-(. My primary interest in this thread was to discuss and learn about buy/write strategies. My initial post asked if that was an appropriate subject. If buy/write discussion will dilute the purpose of the thread, I'm happy to bow out. Good luck Frank and everyone, John

To: Uncle Frank who wrote (1854)	8/9/2001 8:30:37 PM
From: Thomas Tam	Read Replies (1) \| Respond to of 5205

UF, I agree that this thread is starting to get a little complicated even though I think I have a handle in some of my trades. Having said that, occasionally it is nice to hear/read what others are thinking about to deal with this trendless market. I did close my wide range of calls Aug 35, Nov 35 (forgot I wrote this one when I made the trade originally) and Jan 50, and missed the Feb 50s. Question is will SEBL run up again to re-write them again at a higher premium? Probably. Question of the day. Would anyone be willing just to buy SEBL at 30 today and write the Sept 30 calls for (3.60-3.90) for a return of 12-13 percent in ~40 days and let things expire/be called and not think about the market for those 40 days?