Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: kash johal who wrote (95009)	2/24/2000 5:48:00 PM
From: Epinephrine	Read Replies (3) of 1574267

RE: <But $53 a share is not such a bad exit <VBG>.> Kash, I agree and I have been seriously considering writing covered calls against a larger portion of my position in AMD. (to about half) Then if they were exercised I could invest in other areas with the cash from the sale (or freed up margin actually) I would then sell covered calls on the rest of my AMD position and if AMD didn't rise I would keep the premium (and the shares) and if it did then I would use the profit from the previous call's exercise to buy AMD shares to offset the calls I had currently. That way I would maintain a kind of rolling position in AMD that would still generate profit even if AMD stalls for a while. The only thing that keeps me from doing this is all the good news that has been coming out and the potential for a runup into quarterly results. But it seems that such a strategy would: - reduce my risk of being so concentrated in AMD (Currenty 50% margin) - maintain an investment in AMD in case it does take off - generate immediate income from the covered call sales - give myself some flexibility to pursue other opportunities in the market - keep some dry powder in case AMD tanks for any reason at which point I could buy in at that lower value. I may forgo some upside by going with this strategy but I really feel like it might be time for me to be a little more conservative rather than risking the entirety of my life savings on a daily basis. Additionally I don't know if I really would be necessarily missing upside since I could have actually made quite a bit of profit buying in when AMD swung down in the past but couldn't because I had no dry powder. (it was all already in AMD) What do you think of this strategy? Thanks, Epinephrine

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