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Stocks L / Lowe's Companies Inc.


Subject:  Re: LOW Covered Call ? Date:  2/14/2012  2:40 PM
Author:  BuildMWell Number:  1067 of 1080

"I was assigned shares a while back at $24. Does writing April 2012 $27 calls for around $1 seem like a good idea?" - struzyna

Here we are a month later and my answer is , "No!" Don't do it. Today the shares are at $27.75 and the guy who bought your $1 call option is making great money. By April he will likely be laughing all the way to the bank. Then again, the market might fool him...and me.

This is the problem with options. You need to have a way to "see" what is most likely to happen. So, here is my secret to options. Let's see Lowes the way I look at it:

I never sell call options when a stock I own is at 25-year lows. I love to sell options on a business that is at 25-year highs. Like:

The difference is in my perspective. Mr. Market is all about statistical averages. Cheap stocks of great compani