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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: HF who wrote (6581)	1/27/1998 2:37:00 AM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

HF writes: Thanks for your example. ... assuming my calculations are correct. I can't see an advantage either way except maybe less commissions. Something seems to be wrong somewhere. The position is simple, maximum possible profit of $3.75 (the amount of the net credit) and maximum possible loss of $1.25 ($5.00 - 3.75) for a reward / risk ratio of 3. If I buy-write with no put, my reward/risk ratio is 3.75/(stock cost). If I write a 115 cc with a 110 put, my reward/risk ratio is 1.125/3.875 . Thus, my point that I would either make the play with no protection or with no stock.