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: Mike Scott who wrote (11966)	12/1/1999 8:44:00 AM
From: Herm	Read Replies (4) of 14162

Hello Scott! I'm trying to understand your motive for buying PILT. The TA indicators was showing a speculative stock with no earnings making a potential new 52-week high. This stock has a very short history. So, it is really bold taking on the stock at current price levels and then CC. Had you paid $10 and PILT was peaking and you wished to remain long in the stock, the CCs would have been a good defensive move and a good way to lock in the profits in the stock capital appreciation and let your CCer pay for your insurance. Cashing out would have been easier if you just wanted the pure profit. To make your entry just as the stock is going to reverse is taking on unnessary risk. It's like jumping on that bull rider in country bar without any practice or idea of what to expect. PILT NASDAQ: (PILT : $17) $237 million Market Cap at November 30, 1999 Loss Expected for 1999; Internet Products & Services SubIndustry priced at 295.0X PE siliconinvestor.com I see a skyhigh RSI, high OBV, and Stocastics going just about to go negative. Bottom price support appears to be around $11 to $12. I would venture to say you have a downward bias with perhaps some sideways motion. Again, not my choice for jumping on a CC horse. Get ready to cover! We will work on that chart reading some more Mike. :-) Thanks for sharing that with us!

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