S3 (A LONGER TERM PERSPECTIVE) Message Board

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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)

SIII 0.0001000

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May 12 5:00 PM EST

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To: Bill Lin who wrote (7277)	11/4/1997 10:50:00 AM
From: SidStock	Read Replies (2) of 14577

Bill- If you sell the april 10 calls, you will have to wait quite a while to buy them back at a profit. Being this far out, they will not deteriorate in price very fast. And with the bid/ask spread you will have to wait for the ask to drop below a buck before you can make any money. You will also be stuck holding the stock to cover it, and cannot sell the stock if fundamentals get any worse. Writing calls is usually better when the stock has done a recent run-up and you expect it to pull back. Then you can write in the money calls for a short duration out. These will deteriorate directly with the stock price while they are in the money. I would suggest you go check out the thread: How To Write Covered Calls - An Ongoing Real Case Study! For some insight from those who do this a lot. Good luck, Sid

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