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Technology Stocks : Compaq

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To: Mike Gordon who wrote (22943)3/22/1998 12:56:00 PM
From: Night Writer  Read Replies (1) of 97611
 
Mike Gordon,
I have read your market strategy on selling puts and covered calls. Not a bad strategy, and I have used the same strategy at times. It has worked and it has failed. You have to know the stock well to make it work. I have found that buying calls is a loser for me. Selling covered calls is a winner. Buying puts hasn't done a thing for me, except as insurance for selling puts. Selling puts has been a winner so far. Sold cpq March 27.5 CCs when I bought at 25.

However, I like to to use a mix of investment strategies rather then just one. Eating bread all the time would drive me nuts, and the same strategy won't work well on different stocks. Think about it. Selling cpq April covered calls with announcements due out before xday may not the thing to do. If the stock was up, cheap puts might be good for protection. The stock isn't up, and the puts aren't cheap to buy. So that isn't one of my favorites either. Of course I'm going to look again next week. Cheap April calls may be worth a shot, but not a great one.
NW

Now what do you recommend?
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