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

To: dbernet who wrote (3013)11/12/2001 1:45:33 PM
From: DiB  Respond to of 5205
 
dbernet,
if you don't want to get called, I'd recommend selling covered calls at further out strikes, at 22.5 or even 25. You'll still get a nice premium, and it will be easier to repair them if they become in the money.

just my 2 cents,

-DiB



To: dbernet who wrote (3013)11/12/2001 1:55:12 PM
From: Uncle Frank  Respond to of 5205
 
>> The shares are pre IPO with a cost basis of 1.50. I don't want to pay the taxes...

That's an important point, dbernet, as it puts you in the position of selling "synthetic covered calls", which is much riskier than writing plain vanilla ones. I'd suggest you search the archives for the discussions pertaining to that type of transaction.

duf



To: dbernet who wrote (3013)11/12/2001 7:07:25 PM
From: holland  Respond to of 5205
 
dbernet,

I suggset that you investigate the procedure for hedging your position. A covered call is a limited hedge as are the other techniques such as collars or protective puts. You can select puts for better hedges but like deductible on insurance the more protection the greater the cost.
Holland


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