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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: Herm who wrote (7654)	6/16/1998 8:33:00 PM
From: 4 - Bob	Respond to of 14162

Herm, Jen, <Ahhh, I can tell you have been thinking about CCs and the process> I would add that for a stock trading in a predictable range, ccing offers a steady way to generate cash flow. If the stock moves up too rapidly above that trading range, a reasonable choice is to be called out and take a profit. However, if the stock price just constantly trends down or tanks rapidly, the gains from ccing can be eroded by the accompanying fall in stock price. The one strategy that I have learned from this thread that has helped me tremendously is the value of having downside protection in the form of cheap protected puts. When they lose value or expire worthless, you feel as if that was a waste of your funds. But if your stock for ccing fall below your support level and takes a nose dive, you will be glad you did. As a cc writer, option expiration day can be another way of saying payday. For me writing cc and purchasing protective puts have been much more profitable than the underlying stock and purchasing sideshow calls. Live Long & Prosper, 4-Bob