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Strategies & Market Trends : Options
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To: Poet who wrote (4504)3/10/2000 9:26:00 AM
From: Hunt  Read Replies (1) of 8096
 
If I might intrude on your conversation.

The worst case scenario is if the stock price collapses. In your JDSU example,if the price fell to say 175, the $18 premium would hardly make up for the decline in price.

However, the premium would cushion the blow more than just holding the stock outright and OTM calls could be written on successive months until the price recovers. Repairs aka McMillian

In this way, CCing is less risky than just owning the stock.
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