Replies to post #45 on Maksims Covered Call Options Forum

[inflationista]

so as long as you hold one option per option you write you're covered?

so instead of calling your shares do they call the option, or are you saying that your 2.50 price is locked in? and you'd exercise your jan 2010 early...?

cool - :)

[ksbirddog]

I've been selling covered calls.
I'm interested in what you did in the following instance:
So what I did with Ford, is instead of paying $2 a share then, just bought $2.50 calls, for Jan 2010 for a $1. I wrote dec 08 calls for $.40 cents, so 40% of my basis is paid for, in 8 days, Will write the next set, and voila, in 2 months, my 1 year long leap is paid for. I can either close out position, or keep writing.

Can I get you to explain this a little more. TIA