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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 81.16

-2.4%

Feb 4 3:59 PM EST

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To: Sr K who wrote (67953)	5/21/2005 4:11:06 PM
From: rkral	of 77400

Sr K, re "There is a spread depending on liquidity and the factors that go into Black-Scholes. Covered is always lower." I think you are applying "lower cost" to the wrong scenario. If you established one covered call via a buy-write (with a net debit limit) ... and could simultaneously establish a second covered call by buying the stock and selling the call in separate trades ... the costs for the buy-write would generally be lower ... not because the commission(s) would be lower, but because the market maker will accept a lower spread. Ron

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