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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: Kmartin who wrote (9487)	1/17/1999 8:17:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

Personally Kmartin, I don't like to roll upwards. That is, take a loss by covering the CC because the stock shoots pass the strike price on the first CC and sell another new CC at a different strike price in order to recover the lost on the first CC. The more accurate you read the BB and RSI the better you will become in timing the selling of the CC. The more time you have to set by a computer during the day, the better for finding the exact entry point. Now, I realize stocks do run away at times and as CCers we are left holding the bag. Possible Alternative to Rolling UP Take the CC premies and use that money to buy long CALLs at a lower strike price for the same month as the CCs as a sideshow. Reason? First, you can regain control and earn the stock capital appreciation you are missing out on with the runaway CCs if you are called out! Second, if you are called out you can exercise the long CALLs and turnaround and continue CCing or sell the long stock. I've had too many stocks turn on me when trying to roll up. My alternative has reduced that risk for me! It's up to you! If the stock turns on you when you cover, you will be faced with dropping CC premies as the stock drops.