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

To: Uncle Frank who wrote (3592)	4/1/2002 1:01:19 PM
From: Victoria Walley	Read Replies (1) \| Respond to of 5205

That's why you're so conflicted! OK, I made a gross generalization and will back off of it. I do write calls against my LTBH holdings on occasion but it is a different strategy and mindset to me. Last week I wrote BUD Sept 55s, BUD is a very long term hold for me and I do not wish to part with my shares as my cost basis is less than $5/sh. But chartwise I think I will be OK with the Sept 55s and will be able to let them expire worthless or buy to close early for a profit. Not much premium there, so nothing to get excited about. It's just an enhancment to the dividend. But I would take corrective action should the stock go above $55. Today I purchased ORCL for $12.55 and sold the June 12.50s for $1.30. I will gladly let those shares be called away in June. In fact, that is my goal. I have a longer term LEAP position should ORCL turn around, but that hasn't happened yet. The important thing for the CC writer is to have all this worked out ahead of time, then there is no angst over what to do when the stock breaks out or breaks down. Jeffrey posted a simple buy/write he did earlier, but then didn't know what to do when the stock moved up. That's where emotion comes into it... all of a sudden you want to change strategies and suddenly a stock that looked attractive as a buy/write, well now you just can't bear to part with it. That's the part that doesn't work with being a CC writer. We've all been there!