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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 (10696)	5/10/1999 1:27:00 PM
From: David Wright	Respond to of 14162

I use margin out to about 50% equity to mostly double my capital, and I immediately reinvest the premiums at double the premium in buying power, so I get the maximum compounding effect. By selling OTM calls with up-trending TA, and very strong FA, I get margin equity appreciation up to the strike price. I am also getting better at legging into my call writes. Right now, with several early mistakes, I am getting a 15 to 20% return per month, which is how I measure the deals. Fine tuning my trading (entry/exit), and more understanding of options, should put me in the 20-25% per month range in the next couple of months. Can this same strategy be done with writing naked puts, with the relatively minimal risk I run now? (Minimal, because I watch a streamer all day, and have a recovery plan in place for every position). By the way, send me an E-Mail. I would like to exchange some other ideas with you that are off the subject of this thread. Dave

To: Teresa Lo who wrote (10696)	5/11/1999 12:54:00 AM
From: NateC	Read Replies (1) \| Respond to of 14162

Good point, IS.com. I agree......actually Trester, McMillan,....all the authors of about 8 texts I have on options.....ALL say that naked puts are like CC's....but more efficient...and less costly. they are...however....for people who have day gigs (jobs)...and aren't in front of the screen.........more scary. If I've sold a naked put at, say, $130, on a $140 stock....and it tanks to 115, my naked put burns me big time. I know....holding the underlying, when I've sold the CC......basically does the same thing.....but somehow I feel more in control...if I've CC'd...and own the underlying. Someday....after I've gotten better at CC's....I'll do more naked puts. I've found that doing covered combinations.......selling an upstrike CC, and selling a downstrike Put.....(which is naked, even tho I own the underlying)....is a good way for someone who is not too experienced....to get into naked puts. and then our friend Wade Cook....(friend?) would say that you should do a bull put spread...instead of a naked put....if it makes you sleep better to limit your downside risk