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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: Braddoe who wrote (7295)	4/16/1998 12:48:00 AM
From: Hunt	Read Replies (3) \| Respond to of 14162

Brad, I don't no what the other's did, but CC was very profitable last year for me. I was up 93%. I think that starting with only $3,500 made it a little easier, for I had few positions to keep track of. However, I believe I was also fairly lucky last year in that so far this year I am down nearly 20%. Let me tell you the lessons that I learned from Herm, Steve and others on this thread. 1. Know the stock you are going to CC inside and out. Know the financials, know the hints that the company gives in their press releases(the items they generally state can be misleading, it's what is between the lines that is important). If you can touch, feel or visit the product so much the better for you can see how much demand there is for that product. 2. Be patient. Wait for the stock to take a dip before buying and then wait, wait and wait some more before writing the call on the up swing. Make sure that the dip is not a collapse of the stock due to some fundamental reason. Remember, that the fundamentals will over whelm TA every time. I have found that buy-writes generally sting me, so I usually CC as a two step approach for a trade. 3. Read the beginning parts of this thread. Both Herm and Steve (I believe he goes by Hpeace now) have given excellent tutorials on the basics. This is a great primer for the rest of the thread and other books that can be obtained to teach CC. 4. Never be afraid to take a profit. Too many trades go sour, when you try to squeeze an extra $1 out of it. The problems that I have had this year are mainly due to rolling up two strike prices, instead of letting the stock be called away and waiting and waiting.... for the stock to come back down to MY purchase price to start CC'ing all over again. 5. If the fundamentals of the stock change and get bad, close out the position. It is better to take a small loss than to have the underlying stock plummet. Protection of capital is paramount. 6. Cook and other self promoters are in business for themselves. Their job is to separate you from your funds by providing services or products that you chose to purchase (there is nothing wrong with this, every business from the corner 7-11 to INTC to my building company does this). You must choose whether their services are worth the money and what are the less costly alternatives. 7. Keep learning, investigating and ask questions and challenge the answers you get so you can understand those answers. 8. Have fun doing it. If you don't enjoy it, then those days when your stock drops $2 for no apparent reason will drive you to drink, have ulcers, or find that high window. Better to become a rock star instead to make those millions.(ggg)