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Subject:  Re: Covered Calls Date:  9/13/2007  5:20 PM
Author:  Rayvt Number:  59176 of 88101

Yes, I do know it. Did you read the rest of my post? I mentioned that I like this strategy when I think the upside on the position I'm covering is limited...

Yes I did.

I have 2 basic points about Covered Calls. One post each, so that the points will each stand alone.

1st: A CC has the same risk profile as a cash-secured naked put, but with one less commission, since you don't have to buy the stock first. Yet most people would run screaming at the thought of doing a naked put, even cash-secured---while thinking that a CC is a safe easy way to make money.

Yet both of these opinions can't be right, since a CC is just a synthetic CSNP. The disconnect here is a bright red warning signal that there's erroneous thinking going on.
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