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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: Joe Waynick who wrote (7701)	6/19/1998 9:06:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

Hello Joe, You missed some good dialog. To review the most recent repeat on recovery spreads you could start at Message 4508124 or you can enter the phrase recovery spread in the search feature below and highlight body of text to search previous post. The search will not bring up the original dialog which had to do with how to recover from a stock price lost without spending any additional money out of your pocket. Basically, you sell CCs and buy CALLs with the premie money. If the stock goes up you collect the CALL profits to recover from your depressed stock price loss. In other words, the CC premies is leveraged with the CALLs which could shorten the recovery time. Provided, the stock moves back up. If not, then the premies and CALLs expire worthless. Also, in my opinion the recovery spread should be the preferred strategy for those situations when a stock gaps up on you while CCing as opposed to covering at a lost and moving up a few strike prices to get back the lost and risking the stock turning on you.