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

To: Dominick who wrote (3223)	1/10/2002 5:04:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> If not called It's 18.85%, ( 2.10 / 11.14) I disagree with the logic in that computation, Dominick. If it's not called you would need to recognize the loss of investment capital. Since this appears to be a buy/write transaction, I'd think the following formula would be more appropriate for grading your results: (Current price-9.04)/9.04 = return, with 9.04 being your adjusted cost. If the stock ends up at 10 or higher, your return would max at (10-9.04)/9.04=10.6% but if it ends up at less than 10, the return declines, and become negative for anything less than 9.04. jmo, duf