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Investing/Strategies / Retirement Investing
|Subject: Re: Covered Calls||Date: 9/13/2007 5:20 PM|
|Author: Rayvt||Number: 59176 of 81338|
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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