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

To: Jon Khymn who wrote (4214)	4/16/2004 4:44:49 PM
From: Dominick	Read Replies (1) \| Respond to of 5205

Keep us informed of your trades. Who knows, you may just pull it off and teach us battle scarred vets a few tricks. :)

To: Jon Khymn who wrote (4214)	4/16/2004 10:10:04 PM
From: alanrs	Read Replies (1) \| Respond to of 5205

Andrew makes a very valid point. One of the things I always try to remember is that there is probably a very smart person with a whole lot more money than me, who understands options at least as well and probably better than I do, on the other side of any option trade I might initiate. I also want to point out that greater risk has the potential for greater reward, but not the guarantee. In fact, quite the opposite. High risk usually results in high loss. That being said, there are many, many ways to approach options. More than I have the time or gray matter to get a handle on. Some of them are low risk, steady returns. That's the kind I like. I have found that by picking my spots, only buying stocks I would be willing to own even if the price went down, selling calls only at strikes I would be happy to have the shares called away at (when those opportunities present themselves), that covered calls really is the closest thing to a free lunch I have ever found. It's not a free villa on the Riviera, however. At least not for me. Every once in a while I go back and read some of the first few hundred posts on this thread. Good stuff. I wonder how Dale Russell and Ardethan and a whole bunch of other posters I really liked reading are doing. They all helped me become a steady singles hitter in options. Another thing, as long as I'm at it. Frank posted the following "Classical covered call writing against a ltb&h position, which is what this forum was designed to discuss, doesn't require any skill at prognostication. The mechanism is based on recognition of the wasting nature of time premium." I think it's important that anyone writing options understand this. I also think that understanding this is sufficient. There are spreads and collars and repair strategies, synthetic longs and shorts, all manner of things. If I had the inclination it could keep me amused (and confused) most of the time. What has worked well for me is to get really good at a simple strategy (covered calls) that no longer takes up much time, rather than try to embrace all of optiondom (optionhood? optionland?). I would rather make steady, low risk money with options. It's a hedge against all those high risk, high beta tech stocks I own, not the main game. ARS Edit: I'm glad you showed up. Got some people posting. One of the problems with this thread is that once the first group kind of figured out what they wanted to do, there was very little else to post about. Who wants to read a thread of "sold 5 qcom May 70's today" type posts. Also wanted to say high to Dan. How's life treating you?