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

To: im a survivor who wrote (4841)	3/13/2007 3:20:44 PM
From: Uncle Frank	Read Replies (3) \| Respond to of 5205

I get confused easily, too, so I try to keep it simple. My approach is to identify the trading channel of a long term holding, and write calls when it's at the top end, or write puts when it's at the low end. But problems arise whenever there a news related discontinuity. I don't try to fight it, because in the post-bubble markets I'm more concerned about loss of capital than I am about opportunity loss. If I've sold covered calls and the stock spikes, I let myself get called, and buy back when it fills the gap, which generally will happen. If I've written puts and the stock dips, I accept the consignment, because I only write against stocks I like to own. Whenever I consider the consequences of straddles, strangles, or any other tricky strategy, I get a migraine headache :-/. duf

To: im a survivor who wrote (4841)	3/13/2007 8:27:42 PM
From: Jerome	Read Replies (1) \| Respond to of 5205

>>>There has to be a more creative way to 'hedge' our CC's and not get called <<< I think you need a reality check... You happily took the money for the calls now the rest of the deal is for you to uphold your part. Wait until its just a few days prior to expiration. By then there will be little or no time value built into the option premium. This is a very choppy market The stock could be at 43 or at 41. You could also use the cash received for the calls to buy back the options, but again wait till its just a few days prior to expiration. Lots of stuff I own was looking like a sure call out this Friday, but after today , who knows??? JMO....Jerome