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: hpeace who wrote (1039)	3/15/1997 9:16:00 AM
From: Herman J. Matos	of 14162

TECD is a reseller and the computer industry only makes up 11% to 13% of total sales. In other words, they basically sell to end users not in a computer industry like Dell, Compaq. Rather, they sell products like Microsoft Office 97' and Windows-95 upgrades and many more packages. TECD price dropped (during last July selloff) five (5) points over a 7 week period of time. At the same time, USRX dropped from a high of $91.75 way down to $47 1/4 over a twelve (12) week period of time. The VIX (week of July 23, 1996) reached an all-time high of 24.43. This indicator is relatively new. It's been out there about two years, if I recall. The VIX has become more pronounced since 1997. It appears the average volatility is between the range of 20 - 23. So, a blowoff now would jolt that VIX to say 26! Meaning, the correction (when it comes) would be more severe! By the way, the VIX is computed using implied volatility of 8 short term OEX PUTS and CALLS and are weighted to maintain constant 30-day maturity for selected OEX series.

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