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: Herman J. Matos who wrote (728)	3/19/1997 7:59:00 PM
From: Herman J. Matos	of 14162

HOW TO WRITE COVERED CALLS - A REAL CASE STUDY! ================================================================== Date: Wednesday, March 19, 1997 The stock: ROSS STORES (ROST) Last traded at $25.875 down another -3/4 on Wednesday close with a total volume of only 257,500 shares traded. Not much volume for such a Nasdaq blow off today. On Monday, I was leaning more towards a pull ROST back and sold my 4 March calls for a small profit. I'm still holding the covered calls for 4 April 25s Calls that is starting to erode. That my ROST downside protection along with the 4 April 25 Puts that should start to appreciate IF THIS downturn keeps up. The retail sector should be in favor for a few more months. VIX Volatility The VIX calmed down today. It closed down -.52 at 23.75. The technology stocks took the blunt of the hits. My USRX dropped another 6 points between yesterday and today. So, I'm back to repairing that stock after the Friday Expiration of my covered calls. This is a perfect example of how to swallow $1,800 worth of your call buyer's money and protect your stock. I'm now $600 in the hole for that stock. That is not much of a repair job. I've done it before, and I can do it again! Not much chance being called out of that baby this month! <grin> 10 Year-T Bill Closed at 6.710% +.20 and you can see the results in the technology sector. The technology sector is down to the 200-day moving average. It is a do or die for this sector next week. We could get a fantastic trader's bounce (short covering and cashing in PUTS) or a serious pull back across the board. If this indicator does not pull back after next Tuesday Fed's meeting, HOLD ON TO YOUR HATS! They would be out of their minds to raise rates at this time! It may be worth buying some puts for insurance. That's It! Wishing all of you, the BEST OF GOOD BUYS! ********************************************************************************* DISCLAIMER: The writer is presenting a real stock and a live ongoing case study. No recommendations or endorsement to actually buy this stock are suggested nor implied. Trading stocks and buying calls should not be attempted without first understanding the risk/rewards of this type of investment! The writer assumes no responsibility for the opinions being expressed! Buyers always be aware! **********************************************************************************

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