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

To: Mathemagician who wrote (2681)	10/14/2001 3:18:54 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> I thought we had agreed that Roth probably said that for reasons external to the technique... I don't think you are correct. Perhaps it was one of the other dummies that agreed with you. But just in case I've simply forgotten that I agreed, please refresh my memory by providing a link. >> If you disagree, please indulge me with a scenario... If you don't mind, I'd prefer to let Roth indulge you. See pages 54 through 71 of his book, LEAPS. duf btw, if I were bullish to very bullish, I'd buy calls instead of shorting puts.

To: Mathemagician who wrote (2681)	10/14/2001 8:35:30 PM
From: Uncle Frank	Read Replies (3) \| Respond to of 5205

>>The risk inherent in shorting puts is no larger than the risk of writing covered calls. If you disagree, please indulge me with a scenario using a particular stock that illustrates the greater risk in a naked put vs. CC position. I've been picking at that knot all afternoon, and think I've unwound it. Covered call writing as I practice it adds no additional risk to my investment strategy, since I am writing against positions I have already decided to hold over the long term. But in the case of put writing, acquiring the underlying is not the result of choice; it only occurs if the play turns bad. This implies a much lower degree of confidence in the stock, which leads to my belief that put writers assume a much higher level of risk. Note that I have the same reaction to the buy-write approach. In both cases, I feel the risks assumed are excessive in this extremely volatile market. jmho, uf