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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 (9539)1/30/1999 12:13:00 AM
From: Casaubon  Read Replies (1) of 14162
 
repair strategy

Hi Herm,

Can you tell me if this is wrong thinking. Repair strategy in TDFX (15 3/8 net cost). There seems to be some weakness in the stock, so, I think what I have to do is try to catch an up tick in the market and sell the march 15 calls, and then when the stock bounces off the bottom BB buy some march 12.5 calls. The hope being that the stock will rise above 12.5 but below 15 by march 19th. If it does this, I make some money on the my calls using my call buyers premie and thereby reduce my net cost. If the stock rises above 15, I can buy back the calls I sold, with the money from the calls I bought (again using my call buyers premie).
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