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

To: Dominick who wrote (4223)	4/17/2004 12:12:12 PM
From: Jon Khymn	Read Replies (1) \| Respond to of 5205

Program? I ain't got no program... Ever seen a dummy using a program? ;o) Also I didn't look for "overpriced" option, I don't think there are "overpriced" option because high premium options are considered to have "high volatility". So I assumed all premiums on options are "fairly" priced. Rather, I just simply looked for high option premium compared to the stock price. Let's say IMB is $100 now and May 100 call is $2, then monthly premium is 2% (this is the "maximum gain" I can expect from writing this call and from holding this stock until the May option expire. And of course, my maximum potential loss would be 98%) Another example, Let say, LEXR is $10 and May 10 call is $1, then my max gain would be 10% on my equity (Max of 10% ROE per month). I looked for maximum monthly gain potential stocks when writing CC, but of course at higher risk. (My intention is not to make profit from stocks itself but mostly from writing options) That's all folks, Jon