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 (11655)	10/14/1999 7:45:00 PM
From: NateC	Read Replies (1) of 14162

CMGI LEAPs Expect CMGI to move to a higher price with the potential for another split in Jan. 2000. Buying the 70s JAN 01 LEAPs @ $57 and hold for higher prices. Herm wrote: You could CC the 130s CALLs @ 12 or more and cover your nut of $70 strike+$57=$127.00 if called out at $130 with another 2 points. That a total of $14 points or 25% by Jan. 2000. Not too bad! Plus, if you get called out it would taxable in 2000 and you would not pay taxes until 2001. Herm....interesting way to calculate the nut.....underlying PLUS the cost of the LEAPS calls. I posted a previous note showing my SCH LEAPS calls nut at $1 and change.... would you care to educate us all a little about why you calculate the nut on Long LEAPS this way?? thanks Herm

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