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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: Jon Tara who wrote (10782)	5/14/1999 8:21:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Hummm? If a stock price continues to move up, you write CCs short 1 month out at a higher strike price each round, and your strike price falls below target at expiration EACH time and you are not called out, sure you would make more ROI. But, that is rare luck! The odds are higher that you would most likely be called out somewhere along the line. Alot depends on the stock you pick. I would believe it possible with an investor who has owned the stock for quite a while, knows the trading patterns and can read charts. What I try to do is go longer out when the stock is about to reverse and head downward to protect the capital appreciation and buy more shares to average down and compound that leverage with more CCs for the next round. So, the first time on the price upwards trend you have say 5 CCs, the next time 6 CCs, 7 CCs etc. The CCs premies and the stock appreciation help you build up your pot. Again, this is my style since I don't sit around all day watching the stock market. Many people are in the same situation.