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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Dnorman who wrote (7720)6/21/1998 3:12:00 PM
From: Herm   of 14162
 
I don't quite understand your question. Buying the CPQ LEAPs 20 JAN00 @ $11.50 would allow him to control 400 shares of CPQ instead of 200 shares of the stock. Writing a first round of CCs (credit spread)for the CPQ OCT 32.5 @ 1.5 would bring in $600 in premies. It would take much less money to make more profit. He would pay $4,600 to own the LEAPs vs. $5,500 for the stock. That's a $900 dollars in reserve with the $600 premies or $1,500. You can buy alot of turbo charging cheap PUTs at the right time!
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