[Jimbo]

[ QUOTE ]
And I'll anticipate a response: It doesn't matter that you're selling a call with a strike price of $Z, which is greater than $Y - that call will still be underpriced and you should not be selling it if you believe the underlying stock is underpriced.


[/ QUOTE ]

I'll stipulate that this is true the instant you sell the call. But every moment that passes the option becomes less undervalued. Unless you anticipated a rapid upward movement in the stock this is not a good reason not to sell covered calls. If you had anticipated such a rapid rise you wouldn't be selling a covered call in the first place so I must disagree with your post.

Jimbo