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Subject:  Covered Calls Date:  8/14/2007  12:11 PM
Author:  he33bert Number:  58865 of 88067

I am new to "Fool" but an experienced Investor currently officially retired. A good portion of my investments are in Real Estate, 1st and 2nd Mortgages which provide good cash flow. All of my investment funds, including Real Estate Notes, are in ROTH IRA's and a Pension Plan so Income and Capital Gain Taxes are not an issue.

For my Stock Market Investments I invest in liquid stocks, with good fundamentals and also a reasonable dividend.

What is your opinion of writing covered calls to supplement income and to cushion downturns. I find that by using seasonal tendencies and Technical Analysis I can usually time writing a covered call so that I keep the premium. Online Trading also makes commissions negligible.

The only other consideration is that trading less than 400 to 500 shares, i.e. 4 to 5 option contracts, is impractical because then commissions do become an issue. I typically write a call about 8% to 10% above the stock price and no more than 4 to 6 weeks out.

Your opinion of the strategy.

Thank you.
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