How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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

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To: TobaccoMan who wrote (9247)	12/8/1998 3:40:00 PM
From: Herm	Read Replies (1) of 14162

WOW Tabacco Man, You have a heck of a nice profit in WMT! My first response would be to cash out. Otherwise, protect your downside. WMT has a 13.67% growth rate and a P/E that is a bit overpriced at 38.6 P/E. You could grab a hugh premie by selling the 75 JAN01 LEAPs @13 5/8s. That's $2,700 or 13 point downside protection. Or, if you believe WMT will drop from current levels the 65 JAN01 LEAPs @ 23 3/8s will give you $4,600 and 23 points of downside protection. Of course, what you would do is cover at a much lower point when WMT is about to reverse. NYSE: (WMT : $75) $167,320 million Market Cap at December 8, 1998 Ranks 4th in the Fortune 500 on Revenue & 14th on Profit. Employs 675,000. Trades at a 44% Premium PE Multiple of 38.6 X, vs. the 26.7 X average multiple at which the Department Stores SubIndustry is priced askresearch.com

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