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Technology Stocks : Trading TAVA
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To: S.C. Barnard who wrote (510)7/8/1998 9:29:00 AM
From: fma  Read Replies (1) of 655
 
All -Could someone give me a primer on covered calls. Please use the following scenario. Tava is at 10, the expectation is that it will be at 11 within 20 days. You own 10k shares and are overwriting.

I know that you are looking for a 10 percent premium ideally, out of money and out of margin. Lets use November 12s. Ok, here's the question, what happens:
1) Tava falls to 9 tomorrow, vs. September.
2) Tava rises to 11 tomorrow, vs. September
3) How do you calculate downside protection limits?

Thanks, fma
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