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

To: alanrs who wrote (4801)	3/10/2007 5:16:32 PM
From: Sonki	Read Replies (2) \| Respond to of 5205

alan, i make 6.25 in cd (3-5yrs). Coverd calls must offer me 8-10% to take the additonal risks. Most returns in coverd calls are evaporated by the put inurance that i have to b in oder not to loose my shirt. People who manage coverd call mutural funds do not have to b puts cuz they are diversified . i have a spread sheet for covered calls and formulas include reduced cost to own stock by doing cc and then buying put at a striking price where there is a good support in stock. then i weigh risk reward if stock goes to zero or infinity i have some max proift or small loss. if i do that on 10 stocks then in total if i make less then 6.25% then i dont need to be doing that. thus i come up w.8-10%. i tend to sell longer term calls to reduce the down side risk.