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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: Douglas Webb who wrote (7727)	6/22/1998 3:06:00 PM
From: Joseph Francis Torti	Read Replies (1) \| Respond to of 14162

Supposed you want to cover a stock you bought at 85.00 And you want to cover it with an strike price of 85.00 giving you a premium of 3.00 or more and the stock is at 85.00 or more at the time you make the covered call transaction. The 90.00 strike price is not worth selling. Can you do this? Can you cover call a stock that is trading higher then the strike price?

To: Douglas Webb who wrote (7727)	6/22/1998 4:37:00 PM
From: Herm	Respond to of 14162

Thanks Doug for your input on the spreads. What I'm worried about is investors/lurkers thinking that protecting a gapper is too difficult. I'm not crazy about covering CCs at a loss and rolling up strike prices myself. I've had too many burn me in the past. Most investors tend to wait, wait, wait, until the runaway CC is too expensive and the bull run has exhausted itself out before taking action. We also fail to keep an eye on the cause(s) for the run and worry about losing money. Selling (writing) the PUTs would bring in easy money. But, I hate to recommend it for fear of the poor soul that can't read charts and is not quick to pull the trigger without hesitation. We should list all three defensive moves and place a risk/reward comparison. Even between the recovery spread vs. bull spread I would rather try those two compared to simply covering the CCs at a loss.