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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (31296)	4/28/2005 10:35:22 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 110194

For once, I agree with Bernie. Any idiot who says that being called away on a covered call position is a risk is going to try out his new taser on his elderly grandpa with the heart condition. Being called away on a covered call position is the BEST thing that can happen. Except for being called away very early on the same position. The sooner you are called, the higher your annualized rate of return. People can recognize this in selling puts. If you sell a put option, the biggest risk is not that that put option goes to zero. That's the biggest gain. Since covered call writing is a synthetic way to sell puts, it works the same way. These are bullish strategies. Stocks going up is what you want to happen. However, Bernie ignored the fact that the ING fund also buys puts against the position. So, this is not a covered call writing fund. It is a spread conversion fund. The risk and return potential are both much less than for a covered call position.