Archive for February, 2010
John asked:
i noticed that sometimes the extrinsic value of puts is 5 cents higher than their equivalent calls… i believe b/c of this i could make more by writing secured puts instead of writing covered calls.. is it usually the case that the puts are of higher value if one of them is? if so, why?
Rocco Schmal
i noticed that sometimes the extrinsic value of puts is 5 cents higher than their equivalent calls… i believe b/c of this i could make more by writing secured puts instead of writing covered calls.. is it usually the case that the puts are of higher value if one of them is? if so, why?
Rocco Schmal
John asked:
I haven’t worked out the math yet but I’m wondering if it ever makes sense to write a covered call for shares of stock owned and then use that cash to purchase more of the underlying.
I haven’t worked out the math yet but I’m wondering if it ever makes sense to write a covered call for shares of stock owned and then use that cash to purchase more of the underlying.
I’m thinking the stock will either be closer to the call strike price by expiration or in the money.
Johnson Vafiadis
Jar asked:
I have a brokerage account and wanted to write put calls, but my broker is not allowing me to do that. What should I do? I am ready to take the full risk( and associated returns). I gave them that letter too, but they are saying that only covered calls and protective puts are allowed on my account.
Loyce Ochiai
I have a brokerage account and wanted to write put calls, but my broker is not allowing me to do that. What should I do? I am ready to take the full risk( and associated returns). I gave them that letter too, but they are saying that only covered calls and protective puts are allowed on my account.
Loyce Ochiai
iswaswill asked:
Write/sell Feb 2008 covered calls against XLF(28.28 present share price) shares for .16 per share, $16.00 per contract.
Buy the Jan 2010 31$ Call for 3.50
Write/sell Feb 2008 covered calls against XLF(28.28 present share price) shares for .16 per share, $16.00 per contract.
Buy the Jan 2010 31$ Call for 3.50
Buy 28$ LEAP puts so you are hedged to a degree for whichever way the market moves.
Would you have limit sells on these positions? Due to time decay, when would you be wanting to exit the short and longer options if they did not pan out?
Allyson Burrough























