Re: Cover Call Writing

BFD ( big f..k..g deal )  He would have made 17.5% on DIA from Mar '03
to Nov 03 sans the added risk of selling Calls assuming avg price
entry and exit.  11.5% in 12 months.  Current maximum Cov Call return
is now about 16% annual ignoring commissions using Dec. Calls ATM (At
The Money).  Going Out of the Money OTM yields less unless the
underlying rises and the odds are against that happening.  ie The odds
are always against OTM options ending ITM. 

 What friend doesn't know of failed to tell you is that the price of
options on things like DIA has been steadily falling this year to a
record low making selling options on DIA and such very unattractive.

You can see what I am talking about at ivolatility.com  Just enter DIA
and look at the graphs on the right (clickable for larger views ).

arthur
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On Thu, 27 Nov 2003 05:26:16 +0000 (UTC), (axlq in California) wrote:

>In article <[EMAIL PROTECTED]>,
>Ed Smith <[EMAIL PROTECTED]> wrote:
>>A friend is investing with a broker who is call writing the diamonds.
>>He claims an 18% gain so far this year.