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

To: Fargonaut who wrote (3992)	10/15/2002 11:53:06 AM
From: BDR	Read Replies (1) \| Respond to of 5205

Selling a rapidly decaying option (near term expiration, OTM) and/or buying a slower decaying option (further out expiration, ITM) is a way to make the characteristics of options work more in your favor. It is the principle behind calendar spreads and the hedge wrapper you describe with different expiration dates for the short call and long put. Whether it is secure enough for you is something I can't determine. Long a stock with a protective put is more secure than just being long the stock, but whether one should even be in this market is an even more important question. With this volatility capital preservation is difficult.