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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: Kayaker who wrote (872)	3/11/1998 10:53:00 PM
From: Sam	Respond to of 1598

BOB I SOLD 5 UNITS of my BCE calls a month ago ,,2.00 for a may 50 dollar strike ,,When I got back from holidays and read about the increase in rates ,I bought them back at 2.75, my buddy that thinks he knows say you should have bought puts instead of closing your calls,,, BUT today I can get 4.75 for the same calls. man does this get confusing, I better go to school on it,, I think if you sell calls long and they go up big time,you will be sitting there waiting for your strike price, and it aint coming ,these guys are trading your calls and making money,and you cannot do anything about it your capitol tied upin the big stock and no chance of gain,,if you do it with a stock that trades even, up a little down a little every day then you make ,.. Two weeks ago BBD were selling ,,oct strike 30 for 2., today will get you 5.05,,,,but there is no more gain for you on that stock untill some good hearted person, takes them off your hands,,,I could be wrong as I am just learnig,,It seams like a double barreled way to get your gains... Just my Opinion,,,,,SAM

To: Kayaker who wrote (872)	3/12/1998 6:06:00 AM
From: Porter Davis	Read Replies (2) \| Respond to of 1598

>>I'm mostly interested in covered writing right now... Just so everyone is clear on this--buying stock and selling calls has exactly the same risk/reward profile as selling puts naked. It's funny how people view covered writing as conservative and put selling as risky. I personally believe people should trade options, that is, make a market call and take the appropriate option stance. Equity commissions will eat your profits too much. As to your GEAC question: on the face of it, trading a series with an open interest of 30 seems shaky. Any quoted market is good for at least ten contracts. Whether or not you would sell all 30 depends on a lot of things, but in general, it is much better to trade in series with large open interest. It is useful to be aware of what 'cycle' the option class is on--all options are quarterly with the condition that the front two months are always listed. For example ABX is on the Jan-Apr-Jly-Oct quarterly cycle and we currently have months 3-4-7-10. The Aprils have been listed far longer than the Marchs and generally will be better traders. Sam, I read your post several times, and I can sure agree with your comment: "man does this get confusing". I guess all I can say is that stocks move around and options move around as well. Not being critical, just couldn't find the point. Happy trading. Porter