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

To: rydad who wrote (2402)	9/10/2001 6:12:44 PM
From: Dan Duchardt	Respond to of 5205

rydad, For example: if I sold the QCOM Oct 70 for $3.40, and now I see they closed at .65, if I buy back the call, do I sell another call for like Jan 70 at $2.75, or wait for the stock to come up a little? If you have a lot of faith that the stock the stock will come up more than just a little, then you will be rewarded for waiting. You might for example get another chance to write OCT 70 in the $3 range. Of course if you take that risk and you are wrong, you are penalized by a loss of opportunity to write the JAN70 at $2.75. You have to make your own assessment of the market conditions at times like this and decide if profit opportunity, or protection is more important. That's the hard part of this game. If you had known QCOM was going to dip below 50 when you wrote those OCT70s, you could have written OCT50s instead and done very well for yourself. How come they don't sell QCOM Nov options or Dec? They don't show up on my options web site. Now here's a question I can actually answer. Every stock has a regular 3-month options cycle. QCOM is on the Jan Apr Jul Oct cycle. There are always four expiration months available, the current or "near" month (September), the next month (October), and two subsequent regular cycle months (January and April for QCOM now). In addition some stock have LEAPS that expire in January up to 2 1/2 years away (QCOM has 2003JAN and 2004JAN now). Going forward, next month QCOM will have Oct, Nov, Jan, Apr; then Nov, Dec, Jan, Apr; then Dec, Jan, Apr, Jul; etc. Dan