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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 (11851)	11/19/1999 5:44:00 AM
From: Bill/WA	Read Replies (1) of 14162

Herm, "Is there a way out?" On 7/9, with NTAP (Network Appliances) at $63, I sold 2 Dec65 CC's (NJQ-LM) for 8 3/8. My broker suggested buying 2 Dec50 Puts (NJQ-XJ) for 4 5/8 at the same time with the proceeds to "protect my downside"? Now, with NTAP at 118+, the CC's are at 50+ and the puts are at 9/16. iqc.com After much reading (and apparently too late), I fail to see how these puts are going to protect my "downside". As I see it, in order not to lose the 200 shares, my options are: Puts expire worthless / Buy back the calls or roll them up to Mar120's (NJQ-CD @ 20 1/4) or June120's (NJQ-FD @ 24 3/8) and hope for the best. BTW, NTAP will split 2 for 1 on Dec 20. As always, thanks for your thoughts and help, Bill/WA

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