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Non-Tech : The Critical Investing Workshop
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To: lurqer who wrote (9163)3/25/2000 12:18:00 AM
From: she_x  Read Replies (2) of 35685
 
hi lurker,
thanks for your response. i realize this is different than the beano game, which has no emotional or otherwise tie to the stock it's only owned to use, correct? now let me see if i can get this right:

i write calls on the old gorilla at the money, right after expiration to get a good premium and then as the premium deteriorates due to time, etc. i wait til the last minute and buy back my calls at a discount and pocket the difference and keep the stock. did i get that right?

now some people are using margin, as in margin against what you already own and sell calls on the margined shares and then if you do get called you don't care because they don't have that single digit basis and you still own your original shares. is that right? i never use margin though. i don't think i really want to but that may be something to consider.

i'm a pretty lazy, stress-free investor anyway. what's my motivation for using options? i'm trying to answer that myself right now. not really the income, i'm doing pretty well. not to be stress- free i have that downpat. i guess partially for sport and partially to protect what i've already built up in my porfolio. does that make sense?

i agree with you about writing CC's on a stock like MSFT with variables that can really affect the stock price. i also think i understand what you were talking about in the INTC post. when the houses choose a stock to play and conveniently and systematically control the stock price, it makes for a lot of opportunities. the houses have been playing CPQ this way for a while now and some people have been making a lot on it with options as it's predictable as hell. premiums aren't that great, but they're like dependable free money for the taking. although the upcoming ALTA IPo could have some effect on that, i don't know. did i understand you correctly?

just trying to learn all the different strategies that are presented here on the porch. thanks again, she
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