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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: jebj who wrote (10502)	4/22/1999 6:24:00 PM
From: dr. z	Read Replies (1) \| Respond to of 14162

You're terminology "can sell the put against the LEAPS with Perferred,by the way" doesn't make a lot of sense to me. If you are long LEAP calls, selling puts does not affect those calls at all or reduce your risk. For example, if you bought IBM calls at 170 and sold IBM puts at 170 and the stock zooms to 200 you make money on both. If the stock instead falls to 150, you now own calls worth 20 points less and have a debit to buy the stock at 170 when it is selling at 150 (effectively 20 points in the hole as well). If you are long LEAP calls, then selling shorter term calls against them covers you if the stock is called away.