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: Andrew N. Cothran who wrote (3911)	8/4/2002 8:44:11 PM
From: Dan Duchardt	Respond to of 5205

The only problem with this strategy is for QCOM to continue to decline, making your ZLUAF call worthless. There is comparable risk in the (unlikely) event of QCOM suddenly ramping up many points. The value of the near term call will rise faster than the long term call if the price moves well above 30. This is not to say it's a bad idea, just that a calendar spread like this does have an upside risk as well as a downside risk. It can work out very well if QCOM hovers around 30 for some time. Dan