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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 (6550)	1/25/1998 5:16:00 PM
From: HF	Read Replies (1) \| Respond to of 14162

Doug, Another great job. Since you are so good at these, how about a spreadsheet combo of covered calls and puts. Example buy 500 shares of stock. Sell 5 calls and sell 5 puts. My research seems to indicate that this is a better strategy than covered calls as long as you don't mind owning more stock and you can afford to buy it. CBOE puts out an excellent spreadsheet on this called Covered Combo. What do you think and thanks for sharing. HF

To: Douglas Webb who wrote (6550)	1/26/1998 5:09:00 PM
From: Herm	Respond to of 14162

I spoke to my brokerage house today (DLJ Direct) and they confirmed the debit spread senario. That is, I could write (sell) CCs on 1000 shares using the Stock repair overlay spread. Example, sell 15 March 20 CALLs @ 3/4 limit price (11.25) and buy 5 March 15 CALLs @ 2 limit price (10) for a credit of 11.25 - 10 = 1.25 remaining. You are right about having to take care of the short calls (15) by covering before the close. After that, you would cash in the in the money long calls for the profit gravy. It really puts the odds more in your favor for making a profit and rolling over into a new profitable position.