http://qbrain.randomnonsense.com/covered-call-strategy-preview/ Finance, Food, Fitness Tue, 28 Oct 2008 01:36:07 -0500 http://wordpress.org/?v=2.8.6 hourly 1 http://qbrain.randomnonsense.com/covered-call-strategy-preview/comment-page-1/#comment-9867 pwarren Tue, 28 Oct 2008 01:36:07 +0000 http://qbrain.randomnonsense.com/?p=208#comment-9867 it is an understandable strategy. an even better strategy if you are sure of the stock does not rise alot. However as noted, stocks are moving alot at the moment. The problem with the strategy though, is that it sucks out all of your good stocks. As the plan is to try and be rid of the optioin before being excersied, but this may not happen. Options traders generally dont do this option for that reason, as it leaves you with only the less performing stocks in you portfolio. it is just a protective strategy, in which case it is far better to use a collar..... it is an understandable strategy. an even better strategy if you are sure of the stock does not rise alot. However as noted, stocks are moving alot at the moment.
The problem with the strategy though, is that it sucks out all of your good stocks. As the plan is to try and be rid of the optioin before being excersied, but this may not happen. Options traders generally dont do this option for that reason, as it leaves you with only the less performing stocks in you portfolio.
it is just a protective strategy, in which case it is far better to use a collar…..

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