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Strategies & Market Trends : Z Best Place to Talk Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Larry S. who wrote (19365)	3/1/1999 6:57:00 AM
From: AnnaInVA	Read Replies (1) \| Respond to of 53068

Larry, writing covered calls are the least treacherous of the options BUT, you are locked in and this can cause big trouble. Just check out the difference in option price for a 10 point jump. About $4 to $5 dollars right ? Ok, the market dives big time, Yahoo is at 90 and you still have to pay several dollars to get out. So, you stay in. Effectively, you lost $60 for the privilege of a $10 call option. Or, the stock soars to $190, now you sit around and wait to get called, and by then the stock is at $210 and much too high to get back in. Ok, so you cover the call with an additional $20 or $30. The minute you do that, the stock will drop below $140 .... To my way of thinking (and hard learned lessons) it is much safer to spend time to watch your favorites and trade them several times in a month. anna