SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: fubsy cooter who wrote (10382)4/16/1999 8:49:00 AM
From: Herm  Read Replies (2) of 14162
 
If you can trade the CPQ LEAPs in spreads with your brokerage, I would
go that route as oppose to buying the stock. CPQ price has not settled
yet. So, you should be able to buy into CPQ around $23.

Now, if you are willing to spend $500 x $23 = $11,500 for the stock,
you could buy with the same amount of money and control the value in
LEAPs (CPQ CALL 15JAN01 @ 12) 9 contracts for the year 2001. That 900
shares of CPQ if you wanted to exercise later.

UPSIDE GAP

Your B.E. is $15 Strike + $12 LEAP cost = $27 before you have to act
if CPQ gaps upward. Not hardly at this point!

So, with 9 CPQ LEAPs you can write CCs (calendar spread) 9 CPQ 30s OCT
@ 2 = $1,800 premies (16.67%) If you are called out you make another
$3 since the strike price of your CC is $30 and your LEAPs B.E. you
have to clear is $27. So, $2 premies + $3 CC strike = $5.00 total
profit on $9.00 investment (56%). If you wait for some CPQ price
increase the pot is larger.

NYSE:CPQ Last Sale: 23 5/8 -5/8) CPQ Trading Summary

15-APR-99 Ticks Money Flow($MM) Avg. Price
Small Blocks +454 -460 +6.8 -8.3 23.7710
Large Blocks +19 -29 +10.2 -27.6 23.7579
Total: +473 -489 +17.0 -36.0 23.7620

14-APR-99 Ticks Money Flow($MM) Avg. Price
Small Blocks +492 -501 +6.9 -10.1 24.1360
Large Blocks +18 -21 +10.9 -17.6 24.1241
Total: +510 -522 +17.8 -27.7 24.1295
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News