Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: HF who wrote (6556)	1/26/1998 2:07:00 AM
From: R. Gordon	Read Replies (1) \| Respond to of 14162

HF, Amen on buying protective puts!!! It seems that the hardest time for me is entering a new postion. Once a stock has risen, buying protective puts seem cheap, but upon entering they will eat up a lot of potential profit. Your thoughts. Richard

To: HF who wrote (6556)	1/26/1998 7:48:00 AM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

HF writes: I do them [Diagonal Leaps] a little different than you do. I usually buy the long leaps one or two strike prices in the money to increase the leverage. Most people do them that way, Hank, and as long as you don't over commit to any one stock, you're likely to be OK most of the time. Remember, though, you can't write calls below the strike of the LEAPS, unless you're approved for naked call writing. If the stock falls below, you're putting the LEAPS on ice. I have the same problem with buying protective puts, it seems to me that if I'm going to spend the money on protective puts, I might as well go all the way to a short straddle/long combination position and just play the trades.