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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: Teresa Lo who wrote (10680)	5/10/1999 8:52:00 AM
From: Dan Duchardt	Read Replies (2) \| Respond to of 14162

I wrote a very long reply to someone eons ago showing the calculations and premise Personally, I try not to think of March 1999 as eons ago LOL but I need no convincing about the merits of writing cash backed naked puts. Does anyone know a broker who will allow this in an IRA account? As long as the cash is in place, it is not using margin and should not violate any government regs.

To: Teresa Lo who wrote (10680)	5/10/1999 11:00:00 AM
From: David Wright	Read Replies (2) \| Respond to of 14162

I guess every guru has a different definition for some things. Steven Achelis, "technical Analysis From A to Z" says " The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of prices. He takes this from his read of George Appel, publisher of Systems and Forecasts, who developed the indicator. However, Jake Bernstein, author of "The Compleat Day Trader" calls it an oscillator, which is better suited for 2 to 6 day trading, than day-trading. Go figure. I have no experience with selling naked puts, so I defer to those who do to answer the rest of your post.

To: Teresa Lo who wrote (10680)	5/10/1999 4:44:00 PM
From: VincentTH	Read Replies (2) \| Respond to of 14162

You wrote: As for covered call writing, I personally think it's better to write naked puts since it is the exact same position and it actually costs less in terms of transaction costs and should the market be going down, you actually will lose less money doing this...and no, the risk is not "infinite". In fact it's the same as if you own the stock Agreed with you about the risk of NP as being the same as CC. However, I beg to differ that writing NP is the exact same position as CC. The advantage of CC is that you can leg into the position by only shorting the call when the stock has appreciated, thus effectively locking in the gain (well, to some degree, Herm would call it "protection"). I used both CC and NP, and I view writing NP as an effective way to make use of my margin power ('cuz the brokerage house would lend my stock to the shorts anyway, so why not make my stocks work for me instead.) My 2 cents, //V