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Technology Stocks : Cymer (CYMI)
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To: Curlton Latts who wrote (17445)5/12/1998 3:29:00 PM
From: Zeev Hed  Read Replies (1) of 25960
 
I have been writing calls on MRK for the last three years, trying "judiciously" to avoid areas of rise and pick tops. I wrote 7 cycles and only once I got caught with "my pants" down, I turned around and bought back the shares, it increased my annual return (dividends plus option fees) to 15%. That is not talking into account that the stock almost tripled.

On a return basis, a consistent policy of writing options can be quite profitable. My returns could have been higher if I did not stay out in periods where I thought the market would rise. I did a paper study as to what would have happened if a rolled over the options every month and always twrote the closest in the money option, and the returns (without the cap gains on the stock) would have been 22%.

Zeev

Zeev
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