How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: jim clabaugh who wrote (4857)	9/18/1997 12:48:00 PM
From: Zach E.	of 14162

Jim, If you are still bullish on the underlying fundamentals of TECD, then buying back the 45c and selling the dec50c for a wash would be a good move, since you'd be able to participate in more of the rise of TECD. If you're neutral or slightly bearish on the stock, then letting it get called away is the way to go. I definitely wouldn't want to raise my cost basis except for protection (buying puts). I am actually in a similar situation with UTEK: Bought stock at 21 in late June sold Aug 25c for 1 11/16 when stock went to 24 bought Aug 20p for 3/8 before earnings announcement bought back Aug 25c and sold Nov 30c for a wash before expiration. Stock is currently around 31-32. I will wait until more of the time premium erodes before making a decision as to whether to let it get called away or going with the 30c buyback followed by the 35c sale. One more option for you to consider would be to let the stock get called away and sell either 45 or 50 puts. Zach

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