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

To: rydad who wrote (2005)	8/15/2001 1:14:51 PM
From: Uncle Frank	Read Replies (3) \| Respond to of 5205

>> My goal is to find a strategy that is significantly lower risk and returns better than a CD. You and many others, my friend <gg>. But imo, looking for a loophole in the risk:reward equation is the modern day equivalent of the alchemists' search for the Philosophers' Stone. I'm not ruling it out, as stranger things have happened in my lifetime, but I'd suggest that if there is such a strategy, it won't be found in the options arena, where the vehicles we trade are highly volatile and waste rapidly. The simplest and most effective approach I've found consists of writing covered calls against my long term holdings, but even that conservative (by options standards) play is not without its risks. When I close covered calls through buy back or expiration, I rarely end up with an increase in my overall portfolio value; that only occurs later on when the underlying equities (hopefully) appreciate. The risk is that, due to some flaw in my due diligence or change in the structure of the markets, they never recover their value. Good luck in your quest. duf