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

To: Bridge Player who wrote (4541)	10/30/2006 12:29:23 PM
From: alanballow	Read Replies (3) \| Respond to of 5205

Sold PTEN Nov. 22 1/2 puts for $.80 and DOW Nov. 40 puts for .40 Now slowly, for the dummies on the dummy thread, selling puts = buying calls, except you may be obliged to buy at the strike price, meaning you anticipate those stocks trading above the strike price and therefore the options not exercised. The net effect being you keep the premium. Because of the big difference between call and put premiums, I take it you think the calls are overpriced, ie the stocks will not rise enough above the strike price to make it worthwhile. Do I have that right? dab