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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: Greg Higgins who wrote (6128)	12/14/1997 6:41:00 PM
From: patlew	Respond to of 14162

Mr Greg Higgins Steel may be a steal and this may be a LEAP of faith but I'm intrigued. If I understand this correctly the use of LEAPS as a surrogate for stocks would involve the same risks as owning the stock except with a time limit and fewer dollars invested. The predominant risk is that a decline in price of the underlying security would not recover to a point that writing options would be profitable without gambling. In order to insure profitability one should not sell a call for less than his nut (as defined by Mr Herman J Matos) minus premium received. The initial nut would be the strike price of the LEAP plus premium paid (disregarding commissions and taxes). Is this correct? If your listening Mr Matos, what do you think?