Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: dr. z who wrote (10508)	4/22/1999 8:50:00 PM
From: jebj	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. This statement was ment to show that one can sell a put against LEAPS just as one can sell a call - and not be considered "naked". Some of the brokers would let me sell a call while holding LEAPS but not sell a put - doesn't make a lot so sense but neither does allowing a short stock sell but not a naked put, with maybe some margin restrictions. >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. - Exactly what I had in mind - I expected IBM to approach 200 today and at about 10:00 it was at 198+. If Preferred had gotten my account up yesterday, which I had expected, I would have purchased 5 contracts of the Jan00 170 LEAPS and sold 5 of the May 170 puts. This morning as the stock showed reisitance at the 198 level, I would have sold the puts and then sold calls. If I had cashed out totally - both LEAPS and puts - the return would have been very nice but if I had held to LEAPS and then started the WINS cycle of CCing against them I would have been in very good shape. But - it was not to be! It is nice to know that my IBM call was correct and the LEAP/PUT combo would have worked out well. I live to fight another day! :) jb