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

To: PAL who wrote (1869)	8/9/2001 9:02:00 PM
From: William	Read Replies (3) \| Respond to of 5205

Hi Paul - Excuse me jumping in here, but I think you may have misunderstood what Uncle Frank was getting at. He did not say anything about the thread becoming a casino, or address the risks and gambles of options trading. He said that he would not like to see this thread become a general options thread. There are other SI threads that deal with options, much more advanced then what you find here. From this thread header: This is the place to post your thoughts, questions, and comments on how to use covered calls to generate enhanced yields from your tech investments. The thread is geared, as its title suggests, to beginners and/or those interested in relatively simple and straightforward strategies. While a covered short strangle may be a fine investment option, I personally think it goes beyond the scope of simple and straightforward strategies. It might be a better approach as far as this thread is concerned to direct readers to a more advanced options thread if they are interested in learning about such things as CSS. I must disagree with your statement If a person limits his/herself into covered call he/she must know the direction of the market. I disagree with anyone that makes a statement IF INVESTOR ... THEN MUST... No one can KNOW the direction of the market. Yet many only do covered calls. I myself like to keep it simple. I may not make as much money, have and will lose some at times, but I choose to avoid getting fancy. For one thing, I work in an IRA account, and many advanced options can not be done in an IRA account. Thanks for your time, and best of luck to you as well. William

To: PAL who wrote (1869)	8/9/2001 10:30:49 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> I can show you disastrous results from a covered call around 1 1/2 years ago. You miss the point. I am ltb&h in several, what I think are great companies. It is a given that I will hold them through several up and down economic cycles. By writing cc's over the last 18 months, I am well ahead of the game. >> Covered calls should be done in an environment where the market is neutral to slightly bearish... Perhaps you should consider adding "imho" to remarks like that, since your comment differs from conventional wisdom. In his book, LEAPS, Harrison Roth describes the outlook conducive to covered calls as "mildly bullish" (see page 54). >> I hope that you can conclude that "covered short strangle" is more conservative than just covered call. Besides the fact that it is a complicated play, it requires the use of margin, which is not allowed in sheltered accounts. uf