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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: FaultLine who started this subject7/31/2001 12:08:40 PM
From: melman1  Read Replies (2) of 5205
 
Greetings all, this is my first-ever posting on SI. I have dabbled in call options over the last year... I have bought calls with mixed results.

A couple of weeks ago, following someone's lead here, I bought NTAP at 11.11 and sold the August 12.5 call for 1.05 (buy-write). The stock went down to the high $9 range, and the call to about 30 cents, but I held both positions and it is looking good so far. Right now the stock is at $11.71 and the call is 80 cents.

I am now looking at SUNW August calls, and with the stock at 16.15, the August 17.5 call is only trading for 30 cents. I would have expected it to be much higher... perhaps a dollar or so. So obviously I don't understand how options are priced. What is the market telling me? That the market is "sure" that SUNW won't be making a move any time soon?

Thanks.
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