Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Paul Fiondella who wrote (29736)	1/3/2000 2:21:00 PM
From: Scott C. Lemon	Read Replies (2) of 42771

Hello Paul, > What this does is prevents you from going crazy trying to time the > sale like Scott was doing. Also Scott is worrying about a down > move. The call protects you there too. I actually haven't been watching that closely ... I had an original target of $30 for this set of shares ... as Novell passed this number then I brought into the mix my desire to avoid any more capital gains for 1999 ... so I held off selling, but then started to follow the price up with my stop-loss sell order. I really wanted to delay the sale into 2000 ... which I've now done ... and then follow the price up as high as is "reasonable" for me ... ;-) > On the upside, you can try selling well out of the money calls much > farther out in time. For example, a 45 call for 2002 (a leap) sells > for $15. You get $60 but above 60 you don't get anything more. So this is where I'm a little confused about Leaps ... When selling "covered calls" I have to hold the stock, and must give it up upon expiration of the option. Correct? So if that is the case, do I have to lock myself into the shares and hold them for a leap also? (I guess that if expiration occurs, and I don't hold the stock, I'll have to purchase the necessary shares to cover the option and could be really hosed ... ;-) (P.S. PJ, my investment advisor has always said that with calls, you ought to pick a price that you are happy with. If you're happy selling at $35 by a certain date, then selling the covered calls might be the way to go to get even more for the shares now. But you can't look back and feel bad if the stock exceeds that price ... you decided that you were happy with $35, and got even more!) Scott C. Lemon

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