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Investing/Strategies / Retirement Investing
|Subject: Re: Covered Calls||Date: 9/8/2007 12:32 AM|
|Author: Rayvt||Number: 59081 of 75616|
doesn't add any downside risk to your portfolio, no? The catch, of course, is that you limit your upside
That's it. You've got it, but I think you don't know it.
You limit your upside but keep 100% of the downside. How could this possibly be a good idea? What you wnat is to limit the downside but keep 100% of the upside. Google around and see what professionals have to say about CCs. Be aware, the bulk of the hits will lead you to frothy articles about the risk-free sure-fire profits to be made in CCs. Such as "Many people new to options think that covered call type trades are the best thing since slice bread." So try this, too: http://www.google.com/search?hl=en&q=problems+%22covered+calls%22
Oh, well, well, well....our friends at the Motley Fool even have an article: http://www.fool.com/investing/dividends-income/2007/07/12/stay-away-from-covered-calls.aspx
CC's remind me of the old joke, "Other than that, Mrs. Kennedy, how was the parade?" or "Other than that, Mrs. Lincoln, how was the play?"
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