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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: k.ramesh who wrote (9475)	1/16/1999 10:42:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Rames, That question has been asked before and I don't recall a consensus on the topic. Doug has worked on a parity formula that tries to pinpoint the probability of a movement towards a strike price. He can fill you in on that if you two (or anyone else) care to tackle the mathematics. That would be worth while for this forum and all astute investors. With that said, I have experience two cases in which my CCs where in the money and I was not called out for what ever reason(s). That is not normal. According to Larry McMillan, arbitrage trading usually picks up the masses of 1/16s, 1/8s in the money on the last day. So, the odds are very high that you will be called out!