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William, which Dell's calls are you thinking of buying in mid-July? I will have to see to what price Dell drops to, but I generally try to buy the cheapest calls that have a reasonable chance of going into the money. I'll let you know later what that is. These have the greatest rate of return. My time frame will be from mid-July to earnings report in August, and they will be August calls, because I don't want to pay too much premium, and I expect a small decline right before Labor Day weekend, which happens practically every year. Then I'll buy September calls for the September appreciation. Generally stock prices either decline after mid-September, or they stay about the same. Either way, I'll buy October calls toward the end of the month to hold to the beginning of Oct when Intel reports, then I'll buy many Oct puts. The reason is that the law requires money managers to sell by the end of October to pay for distributions. This always causes a BIG decline in mid-October, e.g. both the 1929 and 1987 market crashes were in October. Then I'll buy more calls for the November appreciation, and if the outlook is good, I'll buy calls right before Thanksgiving for the December appreciation at the beginning of the month, which I will sell probably by the second week. So, unless important news changes my strategy, that's basically what I am going to do. |
