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Technology Stocks : Dell Technologies Inc.

DELL 132.78

-5.7%

3:27 PM EST

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To: Mike Gordon who wrote (82483)	11/27/1998 9:34:00 AM
From: Chuzzlewit	Read Replies (1) of 176387

Mike, to bring you up to date, the debate I have been having with Geoff is whether it is more profitable to invest by selling short term covered calls or longer term calls covered calls. I have contended that the shorter term calls are much more profitable. Geoff argues that the models predict equal returns, and that when he takes into account transaction costs, the longer term calls are marginally more profitable. I pointed out that my actual return using this approach has been well in excess of the risk-free rate of return (by almost an order of magnitude). Apratim has argued (and I agree) that the choppiness in implied volatility derived from the Black Scholes model indicates that the game is not "fair". I hope this fairly states everyone's position. What are your thoughts on the relative rates of return (short term calls vs. longer term calls)? TTFN, CTC

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