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Technology Stocks : Semi Equipment Analysis

SOXX 304.96

+0.4%

Dec 23 4:00 PM EST

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To: Gottfried who wrote (11440)	9/4/2003 1:04:55 PM
From: Kirk ©	Read Replies (2) of 95627

few things have been more frustrating for me than watching a stock on which I had sold Jan'04 oom calls rise above strike and see the call premium double. Too expensive to buy the calls back, so I'm stuck and the money in the stock is tied up till Jan'04. This is a better strategy in a falling market. Consider it CASH in your asset allocation and be happy you got the premium. Example: Rather than sell 200 shares of LRCX at $17.50, I split the sell into 100 shares at $17 and then sold a CC contract for $240. This means I effectively sold the 2nd 100 shares at $19.90 if LRCX stays above $17.50. If I really needed the cash, I could always use the shares for margin, but that is too risky. I prefer to just consider shares that are "in then money" from CCs as cash at the selling price. I'm sure the gal who bought the CC from me is sure happy but I was happy to get $19.90 (effectively) for 100 shares I had planned to sell at $17.50.

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