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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Boca_PETE who wrote (1825)10/26/1998 11:56:00 AM
From: Trebor  Read Replies (2) of 15132
 
>but if you think the company has prospects to rise quickly starting by next summer>

By the same token, if you think the stock is NOT going anywhere until next summer or later, why not sell covered calls on part of your position in the meantime? It's a great way to generate cash income from a stock that is otherwise just lying there dormant. UTEK is a perfect covered call candidate assuming its story won't be played out for 6-12 months or so. I bought UTEK at an average of $24 but by selling covered calls on half my position I've brought my overall cost basis down to around $17. So right now, I'm in the black. By next summer I hope to have my cost basis around $14-$15. Meantime, I'm using the cash generated for other investments. I'm a voice shouting in the wilderness about the merits of covered calls, but they sure work for me.
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