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Subject:  Re: Covered Calls Date:  9/11/2007  12:32 PM
Author:  swinginforfences Number:  59152 of 88775

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.

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 and I take the proceeds from the sale of the CC and put it in something else, thus, I still have my "upside", it's just in another stock/option. And, as I also mentioned, the only reason for not outright selling the position I'm covering is usually tax reasons (defer gains into new tax year, hold to qualify for capital gains, etc.).

If you think there's a better way, I definitely would love to hear it. But then what do I do when something I own has hit full value (according to me, of course, but hey, I'm all I have ...) and I would love to sell and buy something that I think has more potential (I'm not working with unlimited resources here) but by waiting a bit (say, weeks to a few months), can defer paying taxes a full year, or pay a lower rate?
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