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Politics : Formerly About Applied Materials
AMAT 259.15+1.1%Dec 22 3:59 PM EST
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To: 16yearcycle who wrote (40899)12/16/2000 5:56:34 PM
From: Jerome  Read Replies (1) of 70976
 
Eugene, here is how I would play it. I Plan on buying AMAT and Novellus on the open. Possibly if the futures market is way down I will wait for the dust to settle.(but I am buying on Monday) If I bought AMAT at 39 near the open and the market continued to collapse then before the day was over I would write the 40's for whatever I could get. Trading profitably is what this is all about. But if AMAT opened flat and then showed the modest strength during the day I would write the 42 1/2's and gain more premium and appreciation value.

One thought crossed my mind today and that was we are reading on this thread and others about the increased volatility with stocks still going nowhere. Look at AMAT it moved from 39 to 49 and back to 39 in about six trading days. This could be the year where the nasdaq goes nowhere, the volatility remains and covered calls are the money wagon.

Its volatility that makes this whole mess work. If I was using a taxable account I would do things a little different. Here I would buy AMAT anywhere under 40. Wait the the for one or two days this month when it jumps 5 points and then write a covered call(that day) a few points higher. If you check the charts on AMAT and NVLS as well the historic quotes section you can get a pretty good idea of the frequency of this kind of event.

I hope that I haven't muddied the waters too much.

Jerome
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