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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 (10266)	4/8/1999 1:08:00 PM
From: NateC	Read Replies (2) of 14162

Anyone else get killed yesterday on SAVLY (Saville Systems ADS)??? It had a bad earnings report..and dropped from a close on Tuesday of 10 1/16.....to open at 6 7/8....and closed at 6 1/4....almost a 40% drop. I had bought at 9...and CC'd the April 12.5...getting about 1 for the CC's...so my nut was 8 Yesterday I bought back the now-worthless April 12.5's for 1/4. making my nut 8 1/4. Today the stock bounced a bit currently at about 7....so I sold the May 7.5 getting 1 7/16 (1.43)....so my nut is now 8.25 - 1.43 = 6.82....and I'm a little ahead of a breakeven (stocks 6 15/16 by 7) despite the 40% hit it took in stock price yesterday. Not a big win (WIN)....but it shows how CC's can protect you on the downside. Thanks Herm..with a little help from McMillan and Trester!!!

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