HOW TO WRITE COVERED CALLS - A REAL CASE STUDY!
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Date: Monday, June 30, 1997
1. TECH DATA (TECD) ON THE UP ROAD AGAIN!
The Stock: TECD had one of the extreme roller coaster price rides today!
From a low of $28 3/8 to a closing price of $31 7/16 to end the day up +1 1/8
with some serious volume of 1,070,200 shares. The big money moved 18
blocks of stock today. Somebody knows the big picture for TECD. Up, Up, and
Up. The last tick for the day was up with 5,900 shares closing the day. It's about
time! TECD made up for my price erosion in VVUS. TECD might get their act
together by the next earnings report. Everybody is waiting for the 2-1 split
announcement. Count me in on this one!
2. VIVUS (VVUS) THE SWEET AND SOUR STOCK?
The stock: VVUS had a hard time today. VVUS last traded at $23 13/16 down
-1 1/16 with so-so below average volume of 722,900 shares. As you will recall,
800,000 shares has been the average volume for the past three months. What's
more crazy is that ZERO (0) large blocks of VVUS stock traded. For you chart
readers, VVUS is showing signs of forming a price channel with an upward
price bias. In fact, VVUS is at the bottom of that price channel. If that proves to
be true this week, we are in for a nice TURKEY SHOOT! GET YOUR
COVERED CALL AND PUTS READY! You see, if a stock starts trading in a zig
and zags pattern within a price range then it is VERY EASY to market time
those points for some extra leverage.
The only other news had to do with a SEC 10K/A for VVUS. That's an
amendment to a previous report. The report talked about an exclusive
distribution contract with Janssen Corp. I need to look that company up. The
deal calls for a $5,000,000 downstroke for the product MUSE.
Let The Trend Be Your Friend!
The sectors with the strongest covered call writing opportunities can be found
at stocksmart.com
VIX VOLATILITY INDEX
It appears like good times are still ahead! 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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