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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Herm who wrote (8444)	9/1/1998 9:52:00 PM
From: VincentTH	Read Replies (2) of 14162

I bought SMOD Aug 20, SMOD Oct 12.5 for 1/4, 3COMS Sep 25 for 1/2, XIRC Sep 17.5 for 1/4 and CPQ Oct 27.5 for 3/8, 10 put contracts each. Sold all except SMOD Oct 12.5 puts for $1 a piece. I sold the CPQ put too early (Monday morning sucker rally) and missed out on the big dip, but made 2X my cost. For volatile stocks like SMOD, a good Option expiration play like the one I did with SMOD Aug20 seems to be a good bear trap play, especially with the tendency of SMOD to report earnings on the Thursday prior to option expiration. For very little money, one can catch a large drop in the stock if earnings do not meet expectation. I bought 10 x Aug20 Put on Wed for 1/4 and sold early Friday morning for a hefty gain, after SMOD beats estimates by 1c. This is good bear hunting season, and I'm getting myself ready for the next round. I can't say enough how I appreciate Herm and the folks who posted here. I never bought PUTs before until now. Had I know what I know now, I would not have lost big $$$ in May when SMOD gave bad earning outlooks (The stock dropped $6+ the next day). //Vincent

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