"Grammar errors"?

[shirasagiforum]

Hello, I am a beginning writer for this company, and submitted my first article which was promptly rejected. The reason given was that you do not accept articles with grammar errors; however, nothing was marked on the article itself. I have reviewed it, and do not find any grammar errors. I am attaching it herein. Can someone please give me some guidance about what you mean by "grammar" errors?

Selling covered calls is a technique whereby the owner of stock agrees to sell his or her stock for a specific price, known as the strike price, by a certain date, known as the expiration date. Options are written as contracts, where each contract controls 100 shares.

A call option grants the right, but not the obligation, to buy a stock at a specific price. If one buys a call option, one buys that contractual right; conversely, if one sells a call option, one sells such right.

This is how the technique works. You have 100 shares of XYZ that you bought at $21.00. You can generate some income from owning that stock by selling covered calls on it. The word "covered" refers to the fact that the option is covered (protected) by the underlying stock. You search the option tables for XYZ and see that the April 2011 $21 call fetches a premium of $.60. That means that you receive $60.00 in your account immediately for selling someone the right to buy XYZ from you at $21. Your break-even cost for the stock is now $20.40, reduced by the premium of $.60 per share that you received for the call option.

At expiration in April, if XYZ is above $21, it will be called away from you (you will sell it) and will have profited by $60.00. If XYZ is below that price, the stock will remain in your account, and you can go out to a future month and sell more covered calls. The covered call you sold for April 2011 has expired, and you are released from any further obligation.

There are several variations on this theme, all of which have advantages and disadvantages, depending on one's sentiment and the vagaries of the market. But covered calls remain a very safe and potentially rewarding source of income.

[kaybretoner]

Hi:) I'm new here too and not an expert by any stretch of the imagination. In a quick read over of your article text I did notice several errors. Do you use any sort of checker before submitting? I believe that even MS Word would pick up the errors I saw.
No checker is going to be perfect, and nothing replaces manually checking and rechecking, but there are some good ones available that can be a big help to get you on the right track.

Good luck with the writing - btw the article was very informative!
Kay

[TomBarth]

Shirasagiforum --

Your article has some things which I would regard as questionable or incomplete, though not as grammatical errors.
(I pasted your text into Word, and at least with my settings, it found no problems.) I know about stock options and
trade them regularly, so can speak from experience. Your article appears to be written to explain them to a complete novice.

You left out a crucial point in the penultimate paragraph: The owner of the stock (who is also the writer of the option)
at the time of exercise (which may be before expiration, but rarely is) has the stock called away, but he is also paid $21 per
share for it. Effectively, selling an option is a bet that by the time the option expires, the stock will be no higher than the
strike price + the option premium. I don't think you make that entirely clear. It's also a bit confusing that you use $21 as
the price of the option, and also the price you paid for the stock. While that's possible, it's a bit misleading to use it as an
example. It would be better to say that the stock was purchased at $20, has appreciated to $21, and now you write (sell)
a call on it.

[SusanSmith]

The only things I can see are:

- The way you write money amounts is inconsistent. Sometimes you put in two zeroes and sometimes not. Also, I think 60 cents should probably be $0.60, but double check that before you change anything.
- You switch between the pronouns "one" and "you." Maybe just stick with one or the other?
- A call option grants [do you need another word in here?] the right, but not the obligation, to buy a stock at a specific price.

I ran your text through Grammarly.com, but since I don't pay for the service I can't see specifically what it's flagging. Grammarly says that you have 1 incorrect preposition, 1 subject and verb agreement problem, 1 sentence structure problem, 2 instances of wordiness, and 5 instances of passive voice. I wonder if some of that analysis is the result of it not recognizing your use of special, technical terms. I can see that your uses of passive voice are part of the lingo that's probably used in investing, so I wouldn't consider them to be wrong.

I can't see any grammar errors either. Sorry. Good luck!