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Technology Stocks : KLA-Tencor Corporation (KLAC)
KLAC 1,194-1.1%Nov 7 9:30 AM EST
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To: Math Junkie who wrote (1568)1/31/2001 4:57:21 PM
From: Jerome  Read Replies (1) of 1779
 
Superior timing is just not that important.

What I was suggesting here is that if you were to buy AMAT at 52 and plan on writing the Feb. or March call at a 55 strike the premium would be about 3 1/2 for the Feb. call and about 4 1/4 for the March call. The exact purchase price as long as it was under 55 is not of great significance. When I do a cc on a stock I first examine the premium to see if its worth the risk, buy the stock and then immediately write the call.

I like SFAM and FSII for the simple reason that I'm playing with smaller dollars. When you buy AMAT you are playing with five thousand dollar bills. And a whole lot can go wrong. Now if You buy SFAM about 9 dollars a share and immediately write the Feb. 10's for 7/8 or 1 you are covered down to the $8.00 price. And if SFAM should drop to 8 the the next month you can write the 7 1/2's. A lot of thread viewers are very conservative, want to do options but don't want a lot of risk. For that reason I included SFAM, & FSII.

From my perspective I would consider AMAT and NVLS medium risk options and SFAM and FSII low risk options. AMAT and NVLS can move down 10 points in two or three days, while SFAM and FSII will not follow suit. Again these are just opinions.

Regards, Jerome
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