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

To: LindyBill who wrote (2257)8/27/2001 3:23:03 AM
From: Mike Buckley  Respond to of 5205
 
Lindy,

we are timing on CC,s also

Yes, but the short-term time is on the writer's side. For the same reason that time is on my side as a long-term owner of a long position, time is also on my side when I write a covered call (while it's against the buyer.)

Tick-tock, tick-tock. The buyer's clock is ticking and with every tick I'm closer to keeping his premium paid for an option that expires worthless. That's very, very different from timing when QQQ will go up or down.

--Mike Buckley



To: LindyBill who wrote (2257)8/27/2001 12:02:35 PM
From: Uncle Frank  Read Replies (1) | Respond to of 5205
 
>> Yeah, but we are timing on CC,s also, Frank

That's only true if we close the position early to capitalize on a sharp dip. We could always let the game play out through expiry. If we've written an otm cc and the underlying stock doesn't surpass the strike price, we keep the premium. If it does surpass the strike price, we keep the premium and get make an additional profit when we get called. It's a win either way.

uf


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