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

To: Al Greenleaf who wrote (4580)	11/19/2006 8:01:30 PM
From: Uncle Frank	Read Replies (2) \| Respond to of 5205

>> I hardly ever sell covered calls. It seems to me that you want to sell them after a run up. But if you sell then, any drop greater than the premium amount puts you into a loss. This thread has promotes writing calls against core holdings as a means of generating income. If your plan is to remain invested in a stock, any covered call premiums generated by them are pure gravy. >> On the other hand, if you expect the stock to run, why not BUY a call? Because you'll be wrong most of the time. Half the time the stock will go down, and even if it goes up, it usually won't rise fast enough to offset decaying time premium. Writing covered calls is a sound and fairly conservative method of milking an income stream from core holdings. Buying calls is gambling. duf

To: Al Greenleaf who wrote (4580)	11/19/2006 9:19:20 PM
From: Bridge Player	Respond to of 5205

Al, I can say only that I tried buying options for years, and have finally become convinced that all other things being equal (and of course they never are), more option sellers make money than option buyers. And then of course there are spreads....diagonals, and calendars, and ratios, and..... It'll drive you crazy. It's an addiction. I am addicted. I swear off! I'm cured! Well, maybe at least until tomorrow......after all, it's Sunday.