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: Herm who wrote (9432)	1/12/1999 5:03:00 PM
From: Herm	Read Replies (4) of 14162

BTGC and IFMX Updates! BTGC continues to [W]ithdraw according to the WINS approach. So, BTGC is in a withdraw cycle with the price heading towards the $6.00 to $7.00 sideways moves until the earnings is released sometime in late January or early Feburary. Zacks has them listed for Feb. 02, 1999. Even with BTGC news today of a new deal with additional cash payments, BTGC went down. The market forces and the BB and RSI don't lie! What you see and read is fact! Either the RSI is up or down! That means the buyers are there or they are not! It does not matter what you and I think! Just keep your eyes on the charts! Looking at the technical chart you will see the RSI is dropping real fast and heading for that 50 zone line. CCers should have written their CCs by now to lock in as much premies as possible. Again, that's an advantage for you if you are long on BTGC. That is income during the pullback to the hedge your position. Many times CCers will take the CC premies and buy PUTs as sideshows to sweeten the pot. In that case, the BTGC pullback should yield a profit for you. We call that a sideshow since we use the CCer's money to pay for our purchase and you don't need to take any money out of your pocket. Now, in the event you did write CCs, purchased PUTs and sold them at a profit, you would then have extra cast to buy more BTGC stock and leverage that profit during the next reverse upward cycle and eventual peak (upper BB tag and high RSI). You would then write more CCs because you will have more stock to write more CCs. You can repeat the process over and over for ever if you like. The net result would be that regardless of the beginning and ending stock price for the year (assuming it goes up!), you should have much more capital value in your portfolio than the BTGC capital appreciation by itself. Yes, it does help to have a stock with a raising price. But, it is equally important to have a predictable stock that has a clear trading pattern. Once you have experienced a full cycle of [W]ithdrawing, [I]ncreasing, [N]eutral, and [S]ideshows like buying PUTs or long calls, you pretty much a wide range of trading skills and can handle any market condition with confidence and still have money to show for it all! :-) askresearch.com Ditto for IFMX! Same thing! IFMX is on a withdrawing cycle and may pull-back all the way to $7.00 or $8.00 range before the earnings release which is due out in late January. askresearch.com

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