SYSTEMATIC COVERED WRITING          More than just covered calls!

Set Up

Follow these steps.

1. Enter a stock symbol in the white text window and then select JAVA CHART by clicking the button.

2. On the left hand side under the heading Chart Options select 1 Year and Daily by using the drop down windows.

3. Using the scroll bar on the right hand side of your browser, scroll down to were you see Upper Indicators.

4. In the top text window, select EMA (Exponential Moving Average) and enter 20 in the window to the right.

5. Leave the middle window selected at None.

6. Using the drop down window select Show All Events.

7. Below this you can select your Price Display.  Choose either OHLC (Open High Low Close) or Line Chart.

8. The lower Indicators can be selected as you desire other than you definitely want to select Volume for one of them.

9. The selections should look like the example below.  Once you have the selections entered click Store Current Settings, which is found under the Chart Settings heading.  Click OK on the Store Settings Window and then click OK again on the next window.

10. At this point it is suggested that you save the location as one of you browser favorites.  Suggested procedure as follows:

• Select 'Favorites' at the top of your browser window.

• Click 'Add to Favorites ...'

• Create a Covered Writing folder by selecting 'New Folder...'

• Type Covered Writing and click OK.

• The click OK.

In the future, when you want to look at a chart, you would just click Favorites, put the curser over the Covered Writing folder and move to the right until the pop up extension opens, and then click Big Charts to return to your saved chart settings locations.

Step 2
	The reason you select 1 Year and  Daily is just a place to start.  Once you decide the Company is 'okay', it is suggested that you also look at the 3 Year and the 6 month chart.  Just change the setting under the Chart Options heading.  This will not change your default settings, which will allow you to always start with the same 'look'.    The EMA or exponential moving average is simply twenty data points added together and then divided by 20 to arrive at an average.  The next data point (number 21), replaces the first data point and so on and so on.  What this does is provide a smooth line that depicts the stock's price movement.  You generally would prefer a stock that is trading above this moving average when you purchase it.  Not a fool proof method, but rather trying to stack the deck in your favor.  This would usually mean the price was in an uptrend.   Showing All Events will provide you with information about earnings, dividends and stock splits.  You generally would select stocks that have recent positive earnings (the orange triangle is pointed up.  A stock that pays a dividend is better than one that doesn't (assuming everything else is equal) and stocks that have recently split (particularly 2 for 1) would also be a favorable choice.   Volume is important.  If nobody is buying and or selling the stock, the premiums for the options will be insignificant.  Depending on how sophisticated you want to become, you can select your preferred indicators in additional to volume.  When all is said and done, never lose sight of the fact that nobody knows.  You can research a stock until the cows come home and still have it lose value once you purchase it. Systematic Covered Writing provides you with strategies to use regardless of the movement of the stock.  Don't lose and sleep over the stock selection process.  In the long run a well diversified portfolio will provide cash generating opportunities.
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