Systematic Covered Writing
... more than just covered calls!
Stock Selection - EXAMPLES
Each example will provide you with the details of how the stock was selected and the thought process behind the initial position. If you accept that fact that in reality, nobody knows, then the SysCW opinion about a stock has no more, or less, value than anyone else's. The Guidelines for the overall portfolio are that no more than 5-8% of the portfolio is invested in any one position. Therefore, any one position is but a piece of the overall investment puzzle. In providing these real time examples, it is important for you to understand that each position established is a small part of the overall investment puzzle.
By itself, an individual position has less value than when it is combined with many other positions in a sector allocated portfolio. These cautionary words are written to again remind you that allocation is one of the keys to the potential success of Systematic Covered Writing. There are times when the potential returns are extraordinary and one might be tempted to 'bet the farm' on one position. This is a trap that you are cautioned to avoid. To view an example, click the link provided.
December 2004
