Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 215.00

+0.7%

Dec 22 3:59 PM EST

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To: Bill Jackson who wrote (72970)	3/2/2002 4:00:52 PM
From: Elmer	Read Replies (2) of 275872

Is that how it is? or is my understanding of the mechanics flawed. You're close. The options expire on the 3rd Saturday of the month they are written for, but because Friday is the last day they can trade we say they expire on the 3rd Friday. You are correct about the numbers. My cost is now $13.64. If they are called away at $15 I will make ($15/13.64)-1 or about 10% for 2 weeks. I will be perfectly happy if the share price drops and stays below $15, in which case the March options expire and I will write more CCs. This is my preferred outcome because as I said, I'm aiming for $0.35 per month, which is 2.5%. Another option(no pun intended) I have is to roll them out. I could buy them back Monday for ~$0.70 and sell the April $15 Calls for ~$1.40. That would bring me another $0.70 and lower my cost to $12.94. The $0.70 premium for April would represent $0.70/$14.09 or ~5% profit for April,twice my goal, and give me the potential for an additional $2.06 or 14.6% profit if I get assigned at $15. As I said, commissions are not significant and have very little affect of the numbers. EP

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