SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Cheyenne Software - Will it be bought by Computer Assoc.?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: WebNoise who wrote (42)4/13/1996 5:57:00 PM
From: olduser   of 130
 
John, There are a lot of factors that affect what premiums you can earn by selling covered calls. One factor is volatility of the underlying stock. A stock that moves very little isnt apt to get you a high premium. Another factor is how much time is left before the option expiration date. The more time that is left, the higher the premium will be. I suggest you take a look at the Wall ST Journal and look at the options price page. They list the options with the highest daily volume. There are many more options traded but they only list what will fit on one page. You can call your broker to find any option price that isnt currently listed in the paper. Just remember, Options arent traded on every stock. They are traded for CYE though. I'll give you an example of how much can be made. I just bought more cye on wed. at 15 1/2. On friday with the stock @ 15 3/4, I sold the May 15 call option for 1 3/4. By taking in $1.75 per share, I have reduced my cost basis in the stock to 13 3/4. If the stock remains above 15 by the 3rd Friday of May, it will be called away from me at $15 ( a 9% gain in one month ). If the stock is below 15, I keep the stock and the premium and I sell the next months covered call when I think I can get the best premium for it. Keep in mind, that if the stock makes an unbelievable run up to 25 ( stranger things have happened ) you are stuck selling it for 15. But lets not be so greedy, after all a 9% gain a month more than doubles your money in a year. I am not suggesting however that those kind of gains are always obtainable, but there always seems to be a group of stocks that are commanding nice premiums. Its a nice way of getting in and out with a profit.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News