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Non-Tech : The Critical Investing Workshop

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To: synchro_fan who wrote (7204)3/13/2000 9:29:00 AM
From: Voltaire   of 35685
 
Hi synchro,

first of all it should only be done with a quality stock and I consider JDSU that.

Second rule, never anticipate and always wait for the margin call to hit.

Lets say you have 2,000 shares of JDSU and you get a margin call for $20,000 or $10 per share. Simply write a call paying at least $30.00 bucks and that will give you your ten per share back plus twenty plus they will match that twenty and instead of a margin call, you have an additional $80,000 in buying power and just wait for a turn around and if it continues then repeat process. As you can see, just with the eighty thousand and no repeating you could answer eight more calls of the same proportion which are probably unlikely. It would be even more dramatic if you sold the leaps that are coming to market but no reason to rub it in the faces of the Houses.

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