RacerX,
I have given up covered calls and will never do them again...sort of. I have been involved with them since 1999 and made some money, but lost plenty as well. Instead since October 2006, I have been using collars. A collar is essentially a covered call with a protective put attached. The biggest problem I found with covered calls is loss of capital. You need to find some volatile stocks to get a decent premium. Of course, if those stocks decline by a wide margin, you still lose a bundle. If they go up, you are called out. So you have violated the first law of money management...let your winners ride and cut losses short.
Go to the internet...type in stock collar and JDSU in google. You will find an article about collars. This is the article that convinced me that I will never sell a covered call without the put. Then come back and ask some questions. I am involved with some collar discussions on RDPD forum and will probably get one up and running here as well since I think the technique can be useful for certain sets of circumstances. It works well for me.
I have given up covered calls and will never do them again...sort of. I have been involved with them since 1999 and made some money, but lost plenty as well. Instead since October 2006, I have been using collars. A collar is essentially a covered call with a protective put attached. The biggest problem I found with covered calls is loss of capital. You need to find some volatile stocks to get a decent premium. Of course, if those stocks decline by a wide margin, you still lose a bundle. If they go up, you are called out. So you have violated the first law of money management...let your winners ride and cut losses short.
Go to the internet...type in stock collar and JDSU in google. You will find an article about collars. This is the article that convinced me that I will never sell a covered call without the put. Then come back and ask some questions. I am involved with some collar discussions on RDPD forum and will probably get one up and running here as well since I think the technique can be useful for certain sets of circumstances. It works well for me.