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Technology Stocks : HWP -- Hewlett Packard
HPQ 22.62+0.6%Nov 20 3:59 PM EST
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To: mp who wrote (1983)4/10/1998 12:43:00 PM
From: Shawn M. Downey  Read Replies (1) of 4722
 
re: Covered calls on HWP.

1. There is a chance that this stock is going to move up significantly. CC'ing will cut into that profit.

2. There seems to be little chance of the stock moving much below 60 (near where it is now). CC's are usually used to provide some downside protection, which is unneeded in this case.

3. Because the stock has moved so little and has been so predictable, the volitility is very low compared to other likely candidates for CCing.

4. Personally, I like to CC a stock immediately after a significant run up. Thus, the stock will have a high volitility (which increases to the call sell price) and I am not likely to miss out on further upside potential.

In summary, I think this stock WAS a good stock to CC in the past but is a poor choice NOW.
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