HOW TO WRITE COVERED CALLS - A REAL CASE STUDY!
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Date: Tuesday, May 27, 1997
TECH DATA (TECD)
The stock: TECH DATA (TECD) WOW! Smoking.....TECD last traded at $28 3/8 up +1 1/8 (+4.13%)again on some SPURT KICKING up volume of 1,865,600 shares. WOW, I love it! TECD is beating a path towards the $30+ level. I'm glad I covered my June 30 covered calls contracts last week and picked up another new 100 TECD shares. I'm still holding off writing any covered calls. The volume is much to high at this point to settle for the lower premies.
Like I said on Friday, I HAVE NO DOUBTS THAT TECD stock price will continue to move up and indeed gap past $30+ up SOON! With a current TECD P/E of about 27 X $1.62 current earnings = $43.74 stock price. Here some more stats: ultra.zacks.com
pcquote.com
THE PICTURE TELLS THE STORY!:
CLEARWATER, Fla., May 27 (Reuter) -
Three months ended
April 30,
1997 1996
Net sales $1,370,146 $985,574
Cost and expenses:
Cost of products sold 1,274,969 916,562
Selling, general and
administrative expenses 59,484 46,285
1,334,453 962,847
Operating profit 35,693 22,727
Interest expense 6,526 5,523
Income before income taxes 29,167 17,204
Provision for income taxes 10,945 6,776
Net income 18,222 10,428
Net income per common share 0.41 0.27
Weighted average common shares
outstanding 44,663 38,589
(In thousands, except per share amounts)
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 to get a feel of the volatility at stocksmart.com
That's It!
Wishing all of you, the BEST OF GOOD BUYS!
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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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