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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Herm who wrote (2353)	5/24/1997 1:19:00 PM
From: Herm	of 14162

HOW TO WRITE COVERED CALLS - A REAL CASE STUDY! ================================================================== Date: Friday, May 23, 1997 TECH DATA (TECD) The stock: TECH DATA (TECD) Last traded at $27 1/4 up +7/8 (+3.32%)again on VERY NICE volume of 766,200 shares. WOW! TECD is moving nicely to the upside towards the $30 level. I covered my June 30 covered calls ate $112 today. My low price entry point with the new 100 TECD shares today helped erased most of that minor red ink. I HAVE NO DOUBTS NOW THAT TECD stock price will continue to move up and indeed gap up SOON! I CAN'T WAIT! Why do I feel that strongly? Besides all the fundamentals and other factors I have mentioned for the past week, HEY CHECK THIS OUT! Somebody is sitting on a powder house worth of TECD DEC. 30's with a total open interest of a whoppin 1,476 contracts. That is not normal for TECD. The math: 1,476 contracts x $30 = $44,280 plus commissions. Now, who would place such a monetary position that TECD will go over $30? Over 84 contracts of the June 25's traded on Friday alone! See for yourself! stocksmart.com I decided to increase my position in TECD on Friday morning around noon time. I was able to pick up another 100 shares of TECD @ $26 5/8. So, TECD made me another 5/8's on that 100 shares. That brings my total to 500 shares in TECD and a nice grin. :-) THE PICTURE TELLS THE STORY!: stocksmart.com Let The Trend Be Your Friend! The sectors with the strongest covered call writing opportunities can be found at stocksmart.com VIX VOLATILITY INDEX Here is another freebee. You can plot the VIX for a 50 day moving average with Bollinger Bands to get a feel of the volatility at stocksmart.com It looks like we are at a low point and you will start to see some rock and roll in the volatility index. Things are going too smoothly. We need to shake the trees to see what falls out before the June 22, 1997 options expiration date. That's It! Wishing all of you, the BEST OF GOOD BUYS! ********************************************************************************* DISCLAIMER: The writer is presenting a real stock and a live ongoing case study. No recommendations or endorsement to actually buy this stock are suggested nor implied. Trading stocks and buying calls should not be attempted without first understanding the risk/rewards of this type of investment! The writer assumes no responsibility for the opinions being expressed! Buyers always be aware! *********************************************************************************

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