Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Sonki who wrote (4802)	3/10/2007 6:01:15 PM
From: Jerome	Read Replies (1) \| Respond to of 5205

>>> Most returns in covered calls are evaporated by the put insurance that i have to b in oder not to loose my shirt. <<< You must be doing something out of whack with most covered call writers. 1) I do between 15 and 20 positions in covered calls each month. 2) I have never ever bought a put as insurance. 3) Even my bad positions work out OK in a few months. ( AMD, MOT) I never did a covered call on Enron or any of the dot coms. Over what period of time is your 6.25% gain spread ? The best spread sheet around is the one between your ears. What stocks are you using for covered calls? Jerome

To: Sonki who wrote (4802)	3/10/2007 6:09:13 PM
From: alanrs	Read Replies (1) \| Respond to of 5205

I was just pointing you at a vehicle that avoids specific stock risk, if one were inclined to play the covered call game. Obviously, your return would depend on how well you were able to sell the tops and buy back the bottoms, and it's hard to make money if what you own goes down in value, no matter what. The reason I mentioned QQQQ is that I've been day trading it (along with the Y-mini & Russell 2000 index futures) and am finding that a 1% a day return is not unreasonable for 4-5 hours work. I don't know if I can keep that up or if I improve with practice, and I would never put all my assets on the line in such a venture, but it's an interesting use of a small portion of my portfolio, as are covered calls. QQQQ trades like a stock. Buy a few 100 shares (commission at IB is 0.005/share with a $1 min), and sell a few calls. Or sell a few puts instead of buying outright. See where it goes. Might interest some who already are plenty exposed to individual stocks. ARS Edit: I also wanted to add that my bias in the futures is short, since I'm already way long the market. That way the worst that can happen is that a portion of my long portfolio is hedged if the futures go against me hard. I will go long and short these vehicles, so selling calls is not what these are about for me, although I have sold calls against a long QQQQ position that made me nervous. I don't short individual stocks.