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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: Douglas Webb who wrote (6547)	1/25/1998 11:56:00 AM
From: Herm	Read Replies (3) \| Respond to of 14162

Wow Doug, Another excellent job for our forum. Looks very impressive and a useful CCer's tool. I have one question for clarification for my own mind. Question? In the spreadsheet you list a stock position of 500 shares owned. You buy 5 Calls at the lower strike price and write (sell) 10 CCs for the same stock at a higher strike price. Is it possible to write (sell) 10 CCs on 500 shares without going naked on 5 contracts. In other words, will a brokerage house allow everyone to do this without an account status to be naked? Or, are the five lower strike price options considered the collateral value against the extra five CCs? Hummm, I have never tried that myself. Of course, your long Calls (5 of the side show) at the lower strike price would cover your 10 CCs (5 plus 5) if they are actually exercised at the end. I'm asking since personally I have never traded naked options before. If sounds like one would have to be approved for naked call writing to use this excellent option strategy which is better than straight CCing. Anyone else care to comment or share their experience on this topic? Thanks Doug and those who care to answer in advance.