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: Barbara Jo Nigh who wrote (11072)	6/18/1999 9:09:00 AM
From: Herm	Read Replies (1) of 14162

Super move Barbara! Like the comment I made to Morgan, QCOM is pretty high right now and may very well pull back on profit taking. The bottom price support looks like a solid $80 - $82 range on the worse case. Yes, your LEAP CC (spread) breakeven (B.E.) would be $79. That means you need to write CCs above that strike price just in case you are called out of the LEAPs. I like big premies and time on my side. So, if I had your hand I would go for the QCOM CCs 120s OCT @ $20. That's nice $4,000 total up front and if called out another $8,200 later. :-) I love those LEAPs! You would have to take action at $120-$20=$100 by rolling down. A more aggressive WINs posture would be the 110s OCT @ 25. You would protect yourself down to $120-$25=$95 by covering and looking at the chart. Again, this is assuming that QCOM has made a new 52-week high and will pull back on profit taking.

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