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Strategies & Market Trends : Covered Calls -- Ignore unavailable to you. Want to Upgrade?

To: phillip who wrote (5)	5/3/1998 6:08:00 PM
From: tchphysics	Respond to of 86

Sounds like an excellent strategy. I'll take a look at doing that in the future. It would generally reduce your immediate return in the form of premiums, but give you the ability to take part in a modest rally. One strategy some people use is to sell the near-the-money calls, such as the June 25's and buy distant out of the money calls, such as July 27.5's or 30's. This also has the effect of reducing the current return, but allows a means of taking part in a rally. It would be interesting to compare the returns of those two strategies. Jeff