Writing Covered Calls / Strangles / Straddles isnt childs play. For example, lets take the above example,
The trade is long NF @ 4290 short 4300 call Jun 07 @93 taken on 1-Jun 2007.
Personally, I dont agree with it for the simple reason that while upside is capped, downside isnt. I would rather reccomend Buying a In the Money Call and Selling either a At the money call or a Out of the Money Call depending upon the call of the market by the writer.
In India, since we dont have Stock Exercise, I personally dislike doing CC on Stocks since there is always a risk that the price where you got called is higher than the price at which you can exit the long position.
Cheers
DT
The trade is long NF @ 4290 short 4300 call Jun 07 @93 taken on 1-Jun 2007.
Personally, I dont agree with it for the simple reason that while upside is capped, downside isnt. I would rather reccomend Buying a In the Money Call and Selling either a At the money call or a Out of the Money Call depending upon the call of the market by the writer.
In India, since we dont have Stock Exercise, I personally dislike doing CC on Stocks since there is always a risk that the price where you got called is higher than the price at which you can exit the long position.
Cheers
DT