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Commodity Trading Discussion Forum

Re: covered call writing question

Posted By: Rick Ratchford
Date: Monday, 2 November 2009, at 12:40 p.m.

In Response To: Re: covered call writing question (Rick Ratchford)

"since the value of the option to the buyer would increase pretty much in step with the value of your long futures."

The above is true, as I didn't mention, once price exceeds the strike. Prior to that, the futures will increase in value faster than the option, as the delta of the option would be less than 1.

:)

Rick

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