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: Bridge Player who wrote (4468)	10/3/2006 5:27:39 PM
From: Jerome	Read Replies (1) \| Respond to of 5205

Hey BP...there are a whole lot of exotic strategies that can be implemented using options. There are all kinds of spreads. Many of these complicated strategies are suitable for owners of a large number of shares...eg...mutual funds. Keeping things simple....In todays market a good covered call should net the seller between 3 and 5% after commissions for a five week selling period. On any given month I write 15 to 20 covered calls on stocks I own or stocks that I buy. Sometimes I can use the same stock for a cc two or three months in a row. Even a losing stock (one that depreciated far below its purchase price) can be used for a cc. If I were to buy something tomorrow for a covered call position I would be looking at GM, LRCX, CHK, HAL, HPQ, MU or HP. These are all sound companies that are likely to beat earnings expectations and they command decent call premium, for both OCT and NOV calls. The important point is don't try to be too slick....or too exotic to obtain a minor gain. JMO....Jerome