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Strategies & Market Trends : The Options Box

QQQ 623.23

+2.2%

Nov 10 4:00 PM EST

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To: Poet who wrote (7067)	11/12/2000 2:00:07 PM
From: robwin	Read Replies (1) of 10876

(OT) Hi Poet, Hope no one minds if I interject a small option strategy question for Texas Instruments (TXN)... The stock like all semi-conductors has been grossly oversold lately...closing price on Friday was $38.75...I am in at about $43.00 or so and have been writing calls every month to reduce my base cost...still like the stock for the near term and long term (6-12 months)... I think the stock should bounce back to the $50.00 range by January, 2001...might be off a bit by this American election stuff (we never have this much excitement in Canada)... I would normally write the front month options this week (i.e. the Dec 40's for about 3.50) and pocket my premiums, but I am concernced that I may get caught in the long-awaited, long anticipated, nirvana-like, year-end rally that I keep reading about...obviously the stock could then take off on me a bit and I would to roll up and out to avoid being called... i do not mind doing that but would it make any sense for me to use those premiums from selling the calls to buy some January TXN 40 calls that I could then convert to common if the stock does in fact take off? Or am I simply playing a zero sum game? Any thoughts would be appreciated...

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