Systematic Covered Writing begins with the establishment of Initial Positions. The covered writer has come to realize that after all of the analysis, after all of the research, that when it comes right down to it, nobody knows which stocks are going to be higher a year from now. With most investment strategies, there is a need for the market (the holding) to move in a particular direction in order for the 'strategy' to end profitably (i.e. 'to work'). As you contemplate a particular example, continually, please ask yourself "what has to happen in order for the example being presented to work". Does the stock have to increase or decrease or can it just stay where it is? If the latter is the case, then do we really have to know which stock is going to appreciate?
For this strategy, the stock either appreciated significantly, or there is a need to close a position early. Needs vary! It may be to provide funds for withdrawal, or possibly to switch to a 'new' position. Whatever the reason . . . let the math tell the story.
You will be able to select examples by clicking any of the links on the desired row.
The Close it or Wait Strategy