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Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!
LRCX 161.43+1.4%Nov 12 3:59 PM EST
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To: Proud_Infidel who wrote (9810)5/13/2001 12:44:48 AM
From: Jerome  Read Replies (1) of 10921
 
**** The Free Ride Option ****

Here is something I have yet to see in any option book. I have discussed this with a few brokers that do a lot of options and spreads and this is our report.

If You bought AMAT on Monday at near the closing price of $51.75 and then immediately wrote a June 55 covered call you would net about $425.00.

If in June you did not get called out (lets say the stock closed at $53/per share) And at that time you immediately wrote the July 55's for at least $425 .

When the July expiration comes around and the stock is still under $55 per share you now have a totally free ride. It does not make any difference what strike or expiration you chose from here on out. You would be very hard pressed to lose money on AMAT.

How often does this happen..... Very Often... On a good stock like AMAT, LRCX, and NVLS three consecutive months without a call out are the norm. Beyond that Its all gravy.

Brian I know that you are not an option player, but I have had numerous requests this past week (PM) to continue posting option strategies. For a while I felt like I was taking to myself, till I stopped posting.

Hope you are having a good year...... Jerome
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