steve, thanks I still think you're probably the most knowledgeable guy on si. I agree with you on dell vs cpq. From virtually every financial angle, cpq looks cheaper and a steadier better long term stock than dell (though they both look great). Hard to understand why the street is so hot on dell. You mentioned "I close spreads when I get above the top end and I quit getting $ for $ on the further
move up." I was thinking about doing that on coms several months ago (I was long Jan 40's and short Jan 50's) when coms was above 50 but I could only get about 6 points at that time and I was holding out for 8. So if I understand you, you are saying to take the 6 points and not wait for the time premium to dissipate. Maybe another case where I was too greedy. Anyway, I have done a little math and I think that provided one can time the sale of the covered call properly each month, one can make a lot more money by going that route, though it obviously is a lot more work than a simple spread.
Thanks for the atml advice, will consider it. Tomorrow may be a good day for buying calls with the bad orcl news. Since you have given me a lot of good ideas let me mention two interesting ideas to you. A very safe buy is emc, they have no competition in their business and they are a blue chip type company that will only go up. I highly recommend them. Easy and safe money. A riskier stock you may want to check out is creaf I think they may go back up to 30, but there is a lot of risk there. Take care. BTW, what is your racquetball level? I used to play and was a little better than average intermediate. Niederhoffer was apparently a world champ at it... Great sport, along with tennis. |
