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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Justin Franks who wrote (14297)10/5/1998 11:31:00 AM
From: Glenn D. Rudolph  Read Replies (2) of 27307
 
Glenn, I didn't understand a word you just said:
>I wrote calls against the longs. They are covered of course.
>I wrote puts agains the short shares and those are covered puts.
>The preiums are so rich that if YHOO stays between 98 and 135,
>I turn a profit. I cannot lose money on this position.
If that's the case,
Looks like I have to crack open the old book and do more reading...

Justin,

My specialy is far from calling stock movements. I can attest to that by my short on AMZN. I decided that a covered option spread would be wise in both and that is what I did. I will do it again after expiration.

YHOO I have 500 long shares with 5 Oct 125 calls I wrote. I have 500 short shares with 5 Oct 110 puts I wrote. I wrote the puts on Friday AM and the calls granted a bit early on Friday afternoon but average premium was 7 points on each. That is a total of 14 points. I went long at 114 and short at 120. That is another 6 points. If YHOO drops below 110 at expiration, I am assigned five hundred shares that closes my short. If YHOO closes above 125, 500 shares are assigned away from me. In either case, I keep the 14 points in option premium.

This is a covered spread. It is conservative although high option premiums is neccessary to make a lot of profit.

There are lots of books on the subject.

Glenn
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