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: Tony D. who wrote (4961)	9/23/1997 7:43:00 AM
From: Herm	of 14162

I sold the VVUS Dec 32 1/2s and like yourself am faced with the same question. My nut is down around $23.+ so I could eat the cost to cover and still be in a strong position. Hind sight is 20/20. I still believe VVUS will plow throught $40 and then reverse for some profit taking. Option #1 Buy the October $35s VVUS CALLs as a sideshow. That way you can get some of the remaining VVUS gain now and grab that cash profit by the October earnings. As the time passes, VVUS may correct back down to $35 in which case you would have more money to cover from the profit off the CALLS and perhaps the time portion of the option may start to kick in. Option #2 Cover your VVUS calls and wait for a price appreciation before the earnings report and lock in a long call again at the money to recover your "give back" and additional stock profit!

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