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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Andrew Shih who wrote (12328)2/10/2000 9:57:00 PM
From: Dan Duchardt  Read Replies (1) of 14162
 
Andrew,

Based on the closing price of 34_5/16, and the corresponding call prices, I am guessing it will cost you at least 3_1/4 to roll up to the APR35s. Obviously, if you get called out at 35 it will have been worth it, but it's only raising your profit potential from the current $6 to about $7_3/4. On the other hand, you might be able to close the position soon with a net gain of almost $5. A near 20% gain in a few days is not bad. If it were me, I'd be looking for a good opportunity to take a profit now instead of waiting for April.

Of course you should also consider Herm's strategy of buying sideshow calls if you think CS can go higher. I'm not seeing any that look better to me than the roll-up you have in mind, but maybe there will be a market for some 40s soon.

Dan
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