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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.11

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3:59 PM EST

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To: Elroy who wrote (74377)	11/2/2007 1:59:51 PM
From: Dinesh	Read Replies (1) of 77400

To complete your example, had you written a $30 covered call on a $30 stock, and the stock fell to $2 (same scenario), you are left holding a stock which is worth only $2, and you lose $28 per share, minus whatever premium you received for the call. It's easier when viewed as a payoff diagram. Both have the same risk-reward with respect to the underlier movement. Regards

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