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Technology Stocks : TAVA Technologies (TAVA-NASDAQ)

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To: Im-patient who wrote (17236)	5/20/1998
From: Y2k_fan	Read Replies (1) of 31646

For those who are not familiar with option trades. There are in general 6 kinds of option trades available. 1) Sell/Buy covered calls. 2) Sell/Buy covered puts. 3) Sell/Buy calls. 4) Sell/Buy puts. 5) Sell/Buy naked calls. 6) Sell/Buy naked puts. I will explain again on one of the strategies on selling covered calls to make money on weakness. eg. TAVA was at $13 last Friday. You feel that it will go down in the short term. Instead of selling your TAVA, you can sell QTV June 10 at 3 1/4 on Friday with a premium of 1/4. Now TAVA dropped to $10 1/2, you can buy back your calls at 3/4. You make 2 1/2 + commissions without losing your stock. If you bought TAVA at 15 and sold at 13, you won't be able to buy back at 10 1/2 if you want to write off the tax. However, you can still carry the loss of $2 over till next trade. Instead of taking loss, now you have a gain of 2 1/2. When TAVA goes back to $13. You will have all your stocks plus 2 1/2 in the pocket. No tax problems at all, wouldn't this be great? As for other strategies, please consult your brokers.

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