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Subject:  Re: Alan Ellman's Covered Call Writing Date:  8/16/2019  8:57 AM
Author:  captainccs Number:  115489 of 115803

Do you plan on selling ITM or ATM calls?

Selling too far ITM doesn’t seem to make much sense as the time value will be reduced. Selling IV without much TV doesn’t seem to make much sense.

I had the same impression when I started out but Ellman has me reconsidering. I don't know yet but your questions points out one of the problems of looking at fundamentals instead of at results. Ellman bases his picks on a range of percent returns, if he gets that return in-the-money, go for it


Option chains were evaluated for strike selections based on bear market environments (in-the-money strikes), neutral to bull market environments (out-of-the-money strikes) and a third portfolio where the average returns meet our goals. The stated goals for this analysis are 2% – 4% initial time value returns with upside potential or downside protection depending on overall market assessment and chart technicals.

[2% – 4% in 30 days is an example I found but I'm not sure of what his range is]

In my case it would depend on "$ per day." The current version of the Call Selector eliminates in-the-money calls.

Denny Schlesinger
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