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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (23614)	4/8/2000 5:21:00 PM
From: DlphcOracl	Read Replies (3) of 57584

OT Rande Is and all: need help/advice with options. I realize there are other threads on SI that go into options strategy in great depth. However, it takes days to wade through the posts, often without having one's specific question answered. My question is: assuming Rande Is is correct (and I think he will be) and the NASDAQ sells off sharply this summer, how does one use covered calls to protect a position in which one already has a large profit one. To give a concrete example (with even numbers, for ease in responding to) for posters and lurkers to respond to: 1. For argument's sake, suppose I bought 1000 shares of AMCC in October 1999 at $30 per share. It closed Friday at $145 per share. The profit at present time, on paper, is $115,000. 2. I anticipate its stock price will decline drastically over the summer, perhaps down to the $60-70 range, between April 15th and Sept. 15th. 3. What is the precise option strategy that will best protect my paper profits without my having to sell the stock and incur the higher tax rate from selling short-term? Many thanks for anyone who can provide some help with this!

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