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

To: rydad who wrote (1913)	8/11/2001 12:46:40 AM
From: PAL	Respond to of 5205

Rydad: There is a new thread started by Dan Duchart which covers covered short strangle and then more. He is even gracious enough to use my example of short put (covered by cash) Jan02/65 and covered call Jan02/75, and has does some spread analysis. He has expanded the original example of the range where beyond which is becomes a loss. Dan is very very good in this field. Personally, I am grateful because my original posting about CSS is to invite those familiar with short strangle to tear that strategy apart so I can learn. Dan has participated in that and I look forward learning from him. Message 16197679 I feel more comfortable to back the short put with cash and no margin. Remember that the proceed of the premium (around $ 1,800) can be used as "collateral" as well in case of assignment. You you need only $ 4,700 to back up your expossure of $ 6,500 (100 shares @ $ 65). One thing to remember is that the important thing is the stock. If you are assigned (majority of assignment occurs at expiry), you are buying a stock that nobody wanted at that price at that time. Of course if a person monitors closely and have some gambling blood then when the stock goes up, cover the put and sell it again when profit taking takes place and do the opposite for call when the stock drops. I am not advocating this. This is good in theory but no one can time the market. In the mean time, learn from Dan to expand CSS or other strategies like synthetic long and synthetic short. I have done synthetic long with profitable return a couple years ago, but that is a different story. I am removing bookmark on this thread. Good Luck to you.

To: rydad who wrote (1913)	8/11/2001 1:09:02 AM
From: PAL	Read Replies (2) \| Respond to of 5205

Rydad: There is a new thread started by Dan Duchart which covers covered short strangle and then more. He is even gracious enough to use my example of short put (covered by cash) Jan02/65 and covered call Jan02/75, and has does some spread analysis. He has expanded the original example of the range where beyond which is becomes a loss. Dan is very very good in this field. Personally, I am grateful because my original posting about CSS is to invite those familiar with short strangle to tear that strategy apart so I can learn. Dan has participated in that and I look forward learning from him. Message 16197679 I feel more comfortable to back the short put with cash and no margin. Remember that the proceed of the premium (around $ 1,800) can be used as "collateral" as well in case of assignment. You you need only $ 4,700 to back up your expossure of $ 6,500 (100 shares @ $ 65). One thing to remember is that the important thing is the stock. If you are assigned (majority of assignment occurs at expiry), you are buying a stock that nobody wanted at that price at that time. Of course if a person monitors closely and have some gambling blood then when the stock goes up, cover the put and sell it again when profit taking takes place and do the opposite for call when the stock drops. I am not advocating this. This is good in theory but no one can time the market. In the mean time, learn from Dan to expand CSS or other strategies like synthetic long and synthetic short. I have done synthetic long with profitable return a couple years ago, but that is a different story. I am removing bookmark on this thread. Good Luck to you.