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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: David Wright who wrote (10537)	4/24/1999 7:00:00 PM
From: NateC	Read Replies (1) \| Respond to of 14162

Herm...thanks for your great post on CCing several months out. I have an MBA, but am simply not experienced enough in options trading to even try to make a case for going every month (after your superb reasoning for going out further) ...except, as Dave Wright as already said...you do have a better compounding effect...using the rule of 72's...if you can make 6%/month...you will double your money in 12 months. But David said that the ROI was 1-3% less by going out a few months...and I wondered, Dave...how you came to that conclusion. for example DELL at 43...today (Saturday)....the 50 calls are bid as follows: May 50 Call 7/8 June 50 Call 2 August 50 3 7/8 so in this instance...the June 2 months out....is more than twice the premie of the one month out SAVLY currently at 13 1/16 May 15 Call 1 3/16 June 15 Call at 2 Aug 15 Call 2 7/8 So...in this case...your best ROI (unexercised)...would appear to be the May 15. If you were to do this kind of trading...and get exercised every month...you'd have a lot of commissions...but you'd have a great ROI. My day job makes me more fond of your approach...and I'm going to start looking it over carefully. I'm beginning to dread expiry day every month...(and particularly the following Monday and Tuesday) thanks Herm for this post...and all the otherS!!