Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Mathemagician who wrote (2464)	9/22/2001 2:11:54 AM
From: LindyBill	Respond to of 5205

Part of my point was that arbitrarily setting it to be the same is a statistically certain way to lose money over time Yeah, I did not agree with the concept of setting the point the same both ways, just did not want to argue it yet. Sorry if I missed your point. My thinking right now is that the market has a downward bias for the next couple of months. Therefore, I am willing to let a short sale go up a more to wait for the down move. I am saying .75 as a cover point, but, in the amounts I will buy, I could cover .25 and make money. Also, I will look at doing it in other stocks than QQQ. I appreciate your input because I really am new at this, and have one hell of a learning curve ahead of me.

To: Mathemagician who wrote (2464)	9/22/2001 7:33:27 AM
From: LindyBill	Read Replies (1) \| Respond to of 5205

Part of my point was that arbitrarily setting it to be the same is a statistically certain way to lose money over time Math, I thought this over and came up with a different way to explain it. The way you present it above is, as you point out, a zero-sum game. However, the market is not a closed, Thermostatic system, but an open, Thermodynamic one. by taking into account the upward bias of the market, You point out here that if we give a small bias, we will still lose. This is true, long term. But, when dealing with a short term situation, as to what may happen in the next month or so, it is much more volatile. I am working with the assumption that the market is still going down for the next month. If I am right, I will have much better odds of winning selling short than long. And in a up market, the opposite would be true, of course. All of this depends on having the correct premises. If I turn out to be working on false premises, I will lose money, no matter, how good my modeling.