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: Herman J. Matos who wrote (268)	2/26/1997 8:56:00 PM
From: Herman J. Matos	of 14162

....HOW TO WRITE COVERED CALLS - A REAL CASE STUDY! ================================================================== ............................Date: Wednesday, Feb. 26, 1997 REPRINT! EXCEL TEMPLATE UPDATE: A special thanks to Russell Lowrey for pointing out a minor error in my Excel template. I originally had the template in MS Works for Windows-95 and I had to transfer over to my new MS Office-97. Anyway here is the correction. Please check cell D26. It should read "C26/C24" instead of "C26/C23" . This cell provides the rate of return if you are called out from your position. The correction will actually give you a higher rate of return since it is pegged to the stock net cost basis (not to the value of the total strike price) Anyone wishing a copy of the free template just email me at hmatos@flinet.com and write send Excel Template in the subject line! ROSS STORES (ROST): Our case study stock today got me excited again! I just happened to check the stock as it made the high of the day at $49 5/8. VERY NICE! Ross closed the day at $48 7/8 up another +2 points on 305,700 shares. Those of you that picked the stock up for around $44.00 three weeks ago are setting on a 5 5/8s profit or 12.78% cash, 25.57% at margined (50%). Add another 4% for the upcoming dividends, the covered call premies yet to come, and you will realize an easy one month total return of 28% cash or 56% margined. My two ROST March 40 calls I picked up at 6 1/8 each is now selling for $ 9 1/8 each for a nifty 50% percent profit in THREE WEEKS! Now, that beats a poke in the eye with a sharp stick! VIX INDEX: Volatility today was rock and roll. The VIX climbed back up to 22.27 up +1.80. I just think it's another shakeout for investors with weak over sized potbellys. Ride em you option cowboys! The 10 year T-Bill stands at 5.48% +.030 and we are looking real good! As I mentioned last week I just put a down payment on my brand new home and I'm going FHA adjustable mortgage which is way down! I want to THANK ALL THOSE COVERED CALL BUYERS out there for making this all possible! My family and I really appreciate how cooperative you have been over the past six months! Bless you all! Now, just keeping on buying my covered calls please!

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