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: Herm who wrote (1477)	3/24/1997 6:53:00 PM
From: Herm	of 14162

HOW TO WRITE COVERED CALLS - A REAL CASE STUDY! ================================================================== Date: Monday, March 24, 1997 The stock: ROSS STORES (ROST) Last traded at $26 1/4 up a solid +2 1/4. Yesterday, I indicated that I felt ROST was still trading in a normal range. And bamm! Great up day on 664,500. Rost will attempt to break through the high of $28. The majority of stocks never do that the first time around without some solid news behind it! The interest rate announcement tomorrow may provide ROST with that boost. It should reach $30 -$31 before profit taking. ROST Option Prices: One of our fellow readers turned me on to this web site! Thanks! Here are the monthly option prices for ROST stocksmart.com Let The Trend Be Your Friend! I almost sold my PUTS this morning for a $400 profit. I went to lunch and came back the suckers dropped in value because of the price increase. Hence, they were selling for mere $200 profit. No way, I will hold on until next time! I have another 3 1/2 weeks and I know ROST will be back down below $25 after this next attempt. Today, was pay day since I was not called out of any of my covered calls in my portfolio. Another month, and few more thousand dollars. the money will clear tomorrow. Love it! I'm going to buy April 25 or 27 1/2 calls tomorrow for another quick profit up to the $31 peak. WHEN I SELL MY CALLS in a few days I WILL BUY MORE PUTS to ride down with the stock and milk it some more. The second pullback ride down is usually greater than the first. That volatility will boost those PUTS. What Covered CALL Cards am I Holding? I'm still holding the covered calls for 4 April 25s Calls. If I don't get called out this week then I'm home free and I will be looking once again to cover my calls when it's to my advantage. An oversold reading on the Bollinger Bands indicator was been reached and the volume reversed today. The price is going back up and I'm a buyer of calls once again to enhance my position. VIX Volatility The VIX closed down by -.05 at 23.83 It was another strange day. The techs are pretty cheap right now. The tech sector is on the 200 day moving average. It should bounce back now that the interest rate discount has already been factored in. 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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