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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Herm who wrote (6236)12/29/1997 2:41:00 AM
From: FR1  Read Replies (1) of 14162
 
Herm - How do you like Compaq? It splits in January and the reports (ML says it will go to $100) seem good. Also the stock is somewhat volatile.

Please let me know what is wrong with the following strategy:

1) I am a little wary of going for little known businesses like VVUS because I watched it drop from $40 to $12 in no time. It would take a lot of CCs to make up for that drop if VVUS does not recover.

2) I somehow feel I will be better off buying solid names like Compaq, building up my shares, and just sit around doing a monthly CC on the stock.

3) If I ever get called out, I add to my shares of INTC, RXSD, etc. and continue.

4) In other words, why not focus all your firepower on getting a lot of shares of a few good businesses, ignore the daily price of the stock, and just sit around writing CCs once a month forever?

Franz
ps - You were right about RXSD. It has gone from 22.5 split to 29 in about a month and Zack says everybody still has strong buy signals.
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