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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: Ken Brown who wrote (8517)	9/11/1998 10:19:00 AM
From: Lost in New York	Read Replies (1) \| Respond to of 14162

Question: If XYZ goes to 35 (or more), but then drops* back to 30, do I still own it? IOW, is the determining factor of whether or not the stock is called from me the price on expiration day?* As long as there is time premium left in the option, no one is going to call the stock from you. The would rather sell the options to someone else and not lose the premium. However, during options expiration week the premium could be so small that you might be called due to arbitrage, although I've never heard of this actually happening to anyone. Dave

To: Ken Brown who wrote (8517)	9/11/1998 8:39:00 PM
From: Herm	Read Replies (2) \| Respond to of 14162

Hi Ken, I will add to the other answer to your question which was correct. As you may be aware, using the Bollinger Bands (BB) and Relative Strenght Indicator (RSI) as your technical charting timing mechanism greatly improves your gauge of what your stock is doing and what the trading pattern has been in the past. After some practice, a quick look at the chart for any stock will give you a "feel" for the direction. Thus, you have many choices of how to handle your profit generating actions. In essence, you have a tool shed of trading tools. If you like you can: 1 buy low and sell high. 2.buy low and sell at the money two months out CCs for the premies. Wait to cover later. 3.buy low and sell in the money two months out CCs for big premies. Buy loads of cheap puts with premies to hedge & addition $$ gains. Wait to close PUTs & cover CCs real cheap. 4.buy low and sell in the money two months out CCs for big premies. No cheap PUTs? Then short the stock to short against the box (downward hedge) & addition make big $$ gains. Wait to cover short stock & CCs real cheap. Again, the most important aspect is knowing when to execute each step of this approach. It is not hard to learn. There is no reason for not making money in any type of market direction!