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Politics : Formerly About Applied Materials
AMAT 262.92+0.4%Dec 29 3:59 PM EST
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To: Andreas who wrote (41960)2/9/2001 9:08:44 AM
From: Jerome  Read Replies (1) of 70976
 
At that point point my portfolio dropped so much in value and so quickly that I couldn't write calls with any meaningful premium at a strike price that was at or above my cost basis

I have written plenty of calls below my cost basis. Lets take AMAT for example. Suppose that you bought it 6 months ago at 65 per share. And you did write at least one call against it. Now the stock is at 42 to 44. Where do I go from here.? Every month I say to myself "here is what I got, and what do I do with it?" If AMAT again moves toward 50 write the 50's one month out for whatever you can get. You might get called out in which case you have a tax loss or you might not get called out.. As far as you can tell is there anything on the one month horizon for AMAT that's going to move the stock from today's price to 60 or 65? The idea here is to wait for a two or three day uptrend in AMAT and the group and then write the next highest strike.

Right now I'm facing the same problem with ASYT. All the shares I bought now have an average cost of $22.00 per share. ASYT is now about 15 a share. When ASYT gets to 16 1/2 to 17 I will write the 17 1/2's one month out for whatever I can get. Right now the March 17 1/2's are 7/8 by 1. Better something than nothing.Given the current environment is there anything that is going to make ASYT jump to 25. Ha, don't I wish for such luck. If I do nothing I have an underperforming asset.

Jerome
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