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Strategies & Market Trends : Options

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To: Jill who wrote (3765)	2/27/2000 8:26:00 PM
From: alias	Read Replies (2) of 8096

Jill, As you probably know from the Porch I've been hammering V on CC's. He's given me some "basic" understanding and I still have some questions for him but he's got a full plate and I think it best I should come over this way for more/additional direction. I'm interested in "protecting" my Gorilla holdings, using them to my advantage if possible and generating income. There are still some "basic" issues which I simply do not grasp. One issue at a time, however: Why would one write at the money CC's on a volatile Gorilla. I do not understand why one's stock would not be called away if (using the example I gave V) you wrote at the money calls on Q at $135 to expire in April and the stock goes to $170 before or at expiration. Or similar scenario for JDSU for that matter. Would appear to me the time to write CC's on high flyers would be after a run-up or after settling down after earnings, etc. I could see buying a stock and writing CC's on a stock you don't particularly give a damn about holding and doing it just for income. What is it I need to get pounded into my brain in this regard? Thanks, Alias

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