crashy writes bhp calls, page-48

re: crashy brilliantly writes bhp calls I guess there are a couple of things to look for in a stock that would lend itself to steady ETO "income".

1) ideally, a slow, Northward moving stock,

2) a stock that trades within a $1.50 range within saya 12 month period (the less the better but still creaping North is best),

3) stocks at around or over the $15.00 range but say less than $25 trading price (reason - stocks that are getting up in price tend to fluctuate in price more than the parameters outlined in 2 above),

4) good solid stock that should remain predictable even in 9/11 type conditions (nobody can predict what will happen in those kind of conditions but if the stock is solid then it should still be around to recover form such events),

5) sometimes even with these stocks, they get re-rated so it is OK to just sit on the side for a few months, holding your stock while it rises (have done this a couple of times with WBC).

WBC seems to be a very good stock for this strategy.

Crashy, I have to admit that I am not nearly as into the nitty gritty of efficiencies of trading ETOs (not got the time really unfortunately). So I just take a more broad (crude) approach. I am looking for at least $600 per ETO trade (or at least more than the interum div plus bro). Typically 7-800 dollars is nice.

BHP is also good, but not quite the bang for your buck as WBC (due to the lower shareprice and they have been a bit more volatile ($8-$13 range over the past few years). Nerver the less, am making steady money with the same strategy on BHP.

I think you do have to pick your stock for this strategy and preferably have a medium to long term plan. For me, I am doing this with my Superfund so am in no hurry to cash in :)