[RT] Managing covered call risk

["schnakeus" <schnake1@xxxxxxxxxxxx>]

Some of you were talking about covered calls awhile back. How do most 
of you handle downside risk in the stock price? You own 100 shares of 
XYZ at $30. Say you sell a 32 strike a month out for $3. The stock 
stays the same or goes up. You keep the premium because of 
deterioration or because it gets called. If it goes down to $27 
your'e even, in theory, although call retains some value til exp. Of 
course if it tanks, you lose. What do some of you do to manage the 
trade? Sell a lower strike call? Have a GTC stop-sell on the stock, 
then buy to close? Any other methodology?
Opinions and ideas, Please and thanks.

Steve


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