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Strategies & Market Trends : The Market Taught Me That......

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To: ratan lal who wrote (15)	11/6/1997 11:19:00 PM
From: Richard Babusek	Read Replies (1) of 151

I agree with naked puts, earlier this year I thought ECI was a good buy @~13-14 (can't remember exactly) & I got about $2 for 12.5 put. The stock was put to me, so my basis was ~10.5. A short time later I was getting ~2 for a 20 call making my cost ~8.50 another 1. for a 22.50 call & I'm taken out at 22.5 with a cost of ~7.5 less commissions. you can see where this happened last may-jun quote.yahoo.com I use this example because the method just happened to find the bottom for me, you gotta be luckey too! I always try to buy at a discount by selling a put, that way if the market runs up before you can (buy on a pull back) you get to keep a little cash (the put premium). Some sites will list cc options based on rate of returns - beware of this strategy! To sell the call you gotta buy the stock, I rarey find a stock on these lists (with high apparent returns) that I would own. If you own a stock that you would be willing to sell, buy all means sell a call 10%-30% out of the money, or if you are afraid of a drop sell an in the money call, sometimes you can do better than a simply selling your stock. Ricardo

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