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Non-Tech : The Critical Investing Workshop
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To: Voltaire who wrote (5287)2/27/2000 10:31:00 AM
From: alias  Read Replies (1) of 35685
 
V,

Thanks for feedback on my homework "analysis" of your friend, Cree and covered calls. I now want to work/study on two hypothetical covered call situations using "real-time" data (today anyway) using two stocks most on this board are familiar.

1. We have Mr Porch Rat. He has a portfolio which consists of 194 shares/$256.00 per of JDSU (I'm using 194 since the value is $50,000. K.I.S.S principal here.) Mr. Rat wants some income from that holding between now and sometime in April. What are reasonable CC options?

To be honest, I've gone to Schwab and looked at various call prices and expiration dates etc, but I don't know how to evaluate them. If I could have one date/price evaluated then I would have a base analysis upon which to compare and evaluate all of them as to upsides and downsides.

Of course, possible split run and anticipated/hoped for S&P entry creates increased volitality on JDSU which may or may not create/skew the way a covered call might normally be written on this stock but since many of us here hold JDSU might as well study it a bit.

2. Mr Rat also has a separate portfolio consisting of 374 shares of Qcom ($50,000) and would like to cover this also.
Options?

Again, this homework assignment is today's pricing. Q and option choices will undoubtedly change dramatically tomorrow AM with HDR announcement and depending upon market FUD going on. But this is for today's study purposes and not on what might be best to do at noon tomorrow.

Alias
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