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

To: Carl Worth who wrote (4732)	2/20/2007 6:32:06 AM
From: Jerome	Read Replies (1) \| Respond to of 5205

>>>if an investor is bullish on a company, and they turn out to be right, they would make more money by being long the stock than by being long and writing calls <<< Here is where we differ in opinion. You can be very bullish on a stock and it may have all the positive signs desired by investors, (good earning, outlook, management, analysts upgrades, etc. ) and it may still go nowhere. So a covered call generates income while waiting for appreciation in share price. I only write covered calls on stocks that I'm bullish on. Otherwise you wind up with a handful of stocks like AMD. I have a small position that I used for covered calls for two months at the 20 strike and now my shares are at 14. JMO....Jerome

To: Carl Worth who wrote (4732)	2/20/2007 10:38:18 AM
From: TimF	Read Replies (1) \| Respond to of 5205

If you already own the shares and you write calls, that call writing is bearish (although if your really bearish you'd probably sell). But a buy write is neutral to bullish. Not strongly bullish (or you would just buy shares or calls), but its still more bullish then bearish. You do best (on OTM calls) if the stock goes up (if you want to keep the stock, that is itself bullish, and you do best if the stock goes up to just under the price where it would be called away) If you think a stock is likely to go down you don't want to do a buy/write.