Here is an excerpt from an article titled "Dominguez Barry Looks at Covered Calls," appearing in the July 20, 1992, issue of Derivatives Week, p. 7:

SBC Dominguez Barry Funds Management in Sydney, with A$5.5 billion under management, is considering writing covered calls on its Australian bond portfolio to take advantage of very high implied volatilities, accord- ing to Carl Hanich, portfolio'manager. The implied price volatility on at- the-money calls is 9.8%, as high as Hanich can ever remember.... In response to rising volatility, Hanich is thinking about selling calls with a strike of 8.5%, generating premium income. "I'd be happy to lose bonds at 8.5%, given our market's at 8.87% now," he said. Explain the strategy that Mr. Hanich is considering.AppendixLO1