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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: jhs565 who wrote (4258)	5/14/2004 10:29:29 PM
From: Dominick	Read Replies (1) of 5205

Hi jhs: Though max pain for May is 95, RIMM does have the potential to drop to 85 in one week. My calculation shows that as of right now RUPQQ is worth $0.55. On May 20th at a price of 85 the put is $1.00 and zero on the 21st if IV stays the same at 0.56. I've done a few of these but they were CC's and didn't care if the stock was called. Whenever I sell puts I have the intention of taking possession if put to me. At best, 85 is a level of support. I think if it did go to 85 it will bounce at the support area. If you had the funds, you could take possession and either sell the stock on the bounce or immediately write a call. Or.......collar it with an 80 put to limit the damage if it tanks. Yes the trade may look easy but your nights may not be. Dom

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