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Technology Stocks : Network Appliance

NTAP 116.33

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10:18 AM EST

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To: Lynn Goodman who wrote (4795)	10/23/2000 1:49:45 PM
From: BDR	Read Replies (1) of 10934

Thanks for the comment. <<Have you developed a set of simple principles to guide you?>> Not ones that meet several conflicting desires on my part(g). I outlined three different outcomes for a covered call position in my earlier post and each one meets a different strategic objective. Unfortunately you may enter a position pursuing one objective and the market ends up delivering one of the other two. I have found that holding v. trading is better for me and I would like to hold the good quality stocks I own now for a long time, paying taxes at the long term rates, market permitting, when I finally do sell them. But, if I generate income in the short run from those same stocks with covered calls, I risk being called out by definition. I can't have it both ways so I have for most of this year settled on just buy-and-hold. Once the holding period on most of my stocks exceeds a year I might reconsider. I am looking at option expirations that would result in exercise of the call a year or more after I acquired the underlying. I am already rethinking the use of calls in my and my wife's IRAs where taxes are not an immediate consideration. I am also mindful of the admonition to not give tax considerations over-riding weight in making investment decisions. There are some ways of predicting when might be a better time to write covered calls but you have to accept and use some of the tools of technical analysis. I would suggest reading the following thread for a while to get a feel for the subject. They have been pretty good in the past about answering newbies questions. How To Write Covered Calls - An Ongoing Real Case Study! Subject 12574 Herm, the thread leader, has a website with more information: coveredcalls.com He uses RSI and Bollinger bands to pick times for selling calls.

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