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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: KevinKT who wrote (21975)	7/24/2011 1:32:05 PM
From: gastrodoc	1 Recommendation Read Replies (2) \| Respond to of 220518

GZ Thank you soooo much for all your efforts to educate us and help us become better investors. I have been wanting to learn how to write covered calls for income, and would appreciate your help in making my first options trade. I am currently overweight in my portfolio in AAPL. I added some in mid-June at an average price of $320, as at that time it was trading at a ridiculous PE of 11, with a growth rate of between 2-3 X that. I would be perfectly willing to let 200 shares go at a higher price 2-3 months from now, especially if someone would pay me a premium for that right, as most of us expect it to go higher over time. What i need is help in placing the trade. Where do I find the symbol for the Sept 11 AAPL call at a strike price of 415. Would I write 2 contracts if I'm doing 200 shares? what would my premium be? I'm sure that once I write one or 2, I will have more confidence in doing this. TYVMIA Tim

To: KevinKT who wrote (21975)	7/24/2011 4:19:02 PM
From: GROUND ZERO™	Respond to of 220518

Yes, but that's not relevant, it doesn't matter, you can keep rolling the options over from month to month before they get called... or even if it is called, so what, you continue the same strategy year in and year out, you will still make more writing at the money covered calls that if you just held on for the big move which may never happen... it so easy to confuse the strategy of buying a stock for appreciation vs. using the stock for the covered call strategy... But, you be very clear, i agree with you that it would be easier of you were bullish on the stock, otherwise why enter into a covered call strategy at all? If you were bearish on it, you would short the stock and do a covered put strategy... GZ