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Technology Stocks : USRX
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To: Price Monger who wrote (17059)3/28/1997 8:38:00 AM
From: Hassell Anderson   of 18024
 
Hi Monger,

I use a very conservative covered call strategy. I only sell out of the money calls with strike prices that are at or above my price targets for the underlying security. Also, I only sell them if the market price is above the Black and Scholes price. B-S is the theoretical price for the option based on the stock's volatility, time to option expiration, etc. For example, I wrote July 60 calls for COMS and May 80 calls for USRX back in February.

With this strategy, I figure I can boost my porfolio return by 1% to 3% per year. Not earth-shattering, but it will add up over time. This is the only options strategy that I can think of where it is statistically probable to get a performance boost without added downside risk. However, I'm not an options expert.

Hassell
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