Best to sell an ATM, ITM or OTM covered call?

Discussion in 'Options' started by crgarcia, Jul 20, 2009.

  1. If youre long the stock and short an ITM call, where is the profit on that?
     
    #11     Jul 20, 2009
  2. Depends on how deep the call is obviously but your point is well taken and the call seller should plan on being assigned and not collecting any div is there is an X div day during the life of the option.
     
    #12     Jul 20, 2009
  3. bpcnabe

    bpcnabe

    #13     Jul 20, 2009
  4. spindr0

    spindr0

    The market was down what, 38% last year?
    It's only temporary, eh?
     
    #14     Jul 20, 2009
  5. spindr0---
    The great irony of your comment is that the market being down 38% IS probably only TEMPORARY, but the losses to people's accounts, well, that's another story!!!
     
    #15     Jul 20, 2009
  6. spindr0

    spindr0

    John,

    The sad part about it is that the American people were sold a "Buy and Hold" bill of goods. Now many possess 201K plans.

    Even worse, Fool Service Brokers have a fiduciary responsibility to invest wisely. Under the Prudent Man Rule, they are required to avoid speculative investments. So a "responsible" investment advisor puts you in Blue Chips.... perhaps the likes of BAC, C, GM, BSC, LEH. Yeh, 38% down might even seem modest to some.

    OK, rant over :)
     
    #16     Jul 20, 2009
  7. You guys are funny, has anyone else read the book "Wall Street Money Machine"? Its an oldie but a goodie. The book goes into great detail on the exact subject the guy that started this thread is talking about doing.

    5-10% per month really isnt that hard, the hardest part is narrowing down the stocks that are going to produce good results. It takes a lot of time.

    I sold my covered calls for the month on CIT (Struck12.8%-not struck32.53%), FITB (Struck6.98%-not struck8.2%) and ARNA (Struck23.80%-not struck25.72%) to make an average return of 14.25%-22.15% this month.

    Check out investors.com (IBD homepage) and go to the "option center" page, scroll to the bottom and find "covered call writes". There are 4 option screens to use, I find most of my stocks on that list.

    Good luck, dont let the "nay sayers" keep you from learning to use this effective technique.
     
    #17     Jul 21, 2009
  8. donnap

    donnap

    Yeah, but you win the comedy award.
     
    #18     Jul 21, 2009
  9. spindr0

    spindr0

    WTH are you doing here, wasting your time on ET? At 5% a month, you're a rock star!

    You need to get $100,000 from mommy and daddy's retirement fund and in 10 years you'll have nearly 35 million dollars from your Money Machine. 10% a month will get you closer to 10 billion in 10 years.

    Go man! Times-a-wastin'
     
    #19     Jul 21, 2009
  10. Watching the herd
     
    #20     Jul 21, 2009