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

To: Uncle Frank who wrote (4620)	11/24/2006 8:10:31 AM
From: Jerome	Read Replies (1) \| Respond to of 5205

You are right. Plus naked writing of any sort requires a higher level of approval by the brokerage firm involved. It also requires a much larger cash position which becomes an anchor on portfolio growth. One general rule that I use is that the covered call premium I generate any given month should be at least two times the margin insterest for that month. A three to one ratio is likely most months. This month Nov. it will be six to one. I prefer being called out because it means more working cash in consecutive months. For the month of Dec. MOT (22 1/2's ), HPQ (40's) INTC 22 1/2's) HAL 32 1/2's are the most likely suspects to be covered. Its a DOW and big cap rally, so that's where I'm placing my bets. Lots of good posters on this site and I hope you all do well and write that book "How I turned $163.00 into $14,657,230.00 in just 46 years." Jerome

To: Uncle Frank who wrote (4620)	11/24/2006 8:11:25 AM
From: Jerome	Respond to of 5205

You are right. Plus naked writing of any sort requires a higher level of approval by the brokerage firm involved. It also requires a much larger cash position which becomes an anchor on portfolio growth. One general rule that I use is that the covered call premium I generate any given month should be at least two times the margin interest for that month. A three to one ratio is likely most months. This month Nov. it will be six to one. I prefer being called out because it means more working cash in consecutive months. For the month of Dec. MOT (22 1/2's ), HPQ (40's) INTC 22 1/2's) HAL 32 1/2's are the most likely suspects to be covered. Its a DOW and big cap rally, so that's where I'm placing my bets. Lots of good posters on this site and I hope you all do well and write that book "How I turned $163.00 into $14,657,230.00 in just 46 years." Jerome