How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: RayV who wrote (10988)	6/7/1999 2:48:00 PM
From: Alan Villalon	of 14162

CKFR - Good CC? Looking at the chart for CKFR, it is currently trading around $40 which is touching the lower 20 day Bollinger Band and the RSI is near 30 (thus confirming an oversold situation). The NOV 45 calls are trading at 8. Thus, my writing these calls would give me a breakeven of $32 (if I bought at $40 and wrote the 45 calls immediately). If the stock trades beyond 45, the calls get exercised and the deal brings in a return of roughly 37% ((45-32)/32 less commissions also). CKFR has rebounded nicely since an earnings preannouncement last year. There is news circulating that they may be bought out at $60 by yahoo. The stock is 42% off its high and is finding a bottom near $40. We can see a quick upswing when internets come back into favor. Comment? -Al

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