CAWS - Wireless Cable (New and Improved) Message Board

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Technology Stocks : CAWS - Wireless Cable (New and Improved)

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To: Stanley L Brown who wrote (374)	11/20/1996 9:48:00 AM
From: .com	of 5812

Hi Stan: I think there is an option thread on SI under Misc. You are right, CAWS is not a good stock to write covered calls if you own the shares at a higher cost basis (ie, bought in at the 7-9 level initially) because you don't want them to take the stock you bought for 8 at 5. But now you've got me thinking. If you were buying CAWS new at $3.50, for this purpose only, wrote a June 5 call contract for $1, the stock goes up and they take the stock at $5, you have made a total of $2.50 for a $3.50 investment (the $1 premium and $1.50 profit you get when they take the stock). This is a 71% increase in approx. 6 months. I have always been thinking of doing this with the costly stocks with high premiums. The problem for me (someone with limited funds) is that I can't buy stocks like IBM, CSCO, SUNW, TX, etc to get the stocks with the good premiums. Some of the over-valued year 2000 stocks like ZITL and VIAS have real high premiums, but I personally think they will come crashing down one day. I wouldn't totally write-off this idea on CAWS if you are a new buyer of it. As I said, you've got me thinking. Have a proftiable day!

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