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Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: Jerome who wrote (175)	4/14/2007 11:28:42 AM
From: Uncle Frank	Read Replies (3) \| Respond to of 5891

Q: If I understand you correctly, your strategy is what a lot of people refer to as a buy/write strategy. A: That is correct Hi, Jerome. I'd say your technique is a variation on the customary buy/write play. The classic technique is to buy the stock and write a call that's at, or even in, the money, and the return is derived from the premium, not appreciation of the underlying equity. In your version, since you're writing out of the money strike prices, the premiums are quite small, and most of your revenue will be derived from appreciation of the stock. Your return will be higher, but so is your risk. Good luck with your new forum! duf