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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (5739)	11/2/1997 11:14:00 AM
From: g.w. barnard	Respond to of 14162

herm, back into vvus and sold nov 27 1/2 cc's. would love to sell naked puts but do not have the agreement yet, have to have some capital as i understand it. i am looing into the combo. and hoping mkt doesn't tank again. gw

To: Herm who wrote (5739)	11/2/1997 5:33:00 PM
From: David Walton	Read Replies (1) \| Respond to of 14162

Herm, please excuse me for jumping in. I know you are an experienced investor. Does your post mean that you personally prefer writing naked puts to covered calling. I have read McMillan and agree that is is somewhat of a superior strategy than covered calling. I recently was going to write calls against CPQ when it was $75 a share I'm glad I didn't. Also what do you think of buying deep in the money option as a substitute for the stock and then writing covereds calls against them to increase the return on investment as in covered writing? Regards, david

To: Herm who wrote (5739)	11/3/1997 12:56:00 PM
From: Zach E.	Read Replies (1) \| Respond to of 14162

In essence, what McMillan is saying is that if you only have to front 20% of the value and you stand to make the same profit as covered call writing then you have more leverage with naked PUTs. Herm, This statement is certainly true, but if you're going to use that much leverage, you need to make sure that you have a point at which you're willing to get out of the trade (and hope that it doesn't gap below that point!). Tom Trader had a nice post on writing naked puts at, techstocks.com Zach