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: the options strategist who wrote (7546)	6/1/1998 3:57:00 PM
From: VincentTH	Read Replies (2) \| Respond to of 14162

Jen, Normally I buy calls when 1. I believe long term, the stock will grow. This requires the availability of LEAPS, and I'd buy 2 years out deep ITM calls. 2. Stocks that I believe are due for a breakout soon. To answer your question: The main difference between CC and spread is that CC is more conservative: Even if the stock under-performs, the loss is just a paper loss, except when you are forced to sell (<VBG>, SMOD is a recent bad experience for me). For spread, the time is working both for and against you, so you need to buy long term calls. The availability of LEAPS is, therefore, important, unless you are pretty convinced that the stock will break out soon. A lot of people, including me, have been burned by those side-shows (calls that we bought that expire worthless).