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: PeterCS who wrote (12179)	1/15/2000 2:25:00 AM
From: Dan Duchardt	Read Replies (1) of 14162

Peter, Your safest option at this point is to do nothing, get called out, and see what develops in the future, perhaps catching IFMX the next time it tags the lower BB with low RSI. But the chart looks like a move to 12 is very possible in the next week or so. If you want a better reward and can tolerate some risk, you could cover the Jan 7_1/2s (as I write this they are offered at 3_1/2 with stock at 11; time value = 0) and write a new round of calls at the next upper BB tag with RSI peaking again. That looks like a fairly safe play. Of course you have the alternative to write a new round anytime you want. beta.siliconinvestor.com Our resident expert Herm likes to write a couple of months out, so March seems a good time. Some others prefer the next month and more active dealing. Looks like you will have to wait a bit for a March series to begin. If the oscillations are going to continue with a one month period, then one month out is a good choice, in my opinion. I unfortunately got out of IFMX at 9 and change just before it took off, but my guess is the days of swinging down into the 7s are behind us. If it gets to 12 soon, the Feb10s should give you a healthy premium above $2 (bid 1_5/8 now) If you are bullish on the stock the Mar12_1/2s would be a good choice when you can sell them. Herm has posted on IFMX several times. Be sure to go back and read his comments. Dan

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