How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: rkf who wrote (5087)	9/29/1997 11:31:00 PM
From: Douglas Webb	of 14162

Interesting. At first, it looked like HMTT didn't give very good signals, using the 20-day 2-std bollinger bands and 14-day RSI. Then I tried using 10-day 1.5-std bb and 7-day RSI, and the signals are pretty clear. You can use stockwizard.com to set the parameters. VectorVest values HMTT at $23.60, which isn't $30, but it's still a nice gain from $16. 51% discount PE is pretty nice too. Premiums aren't bad, with the Nov 15 at $2.5 and Nov 17.5 at $1.375. The only thing I don't like is that there's very little price movement. The bands are real close together (about $1 apart) which means that premium gains can be small, and therefore swallowed up by commissions unless you trade real large blocks. Now, if I had $15k - $20k, I might do this, since it looks real easy to work. Doug.

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