CMGI What is the latest news on this stock? Message Board

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Technology Stocks : CMGI What is the latest news on this stock?

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To: PAL who wrote (8148)	5/12/1999 1:14:00 PM
From: AmericanVoter	Read Replies (2) of 19700

PAL, that is perfect in theory... HOWEVER.... if CMGI rallies hard and passes 300... chances are your covered calls will get called... you made 300/shares... NOT so fast... before Jan01, for whatever reason, as it rallied hard, it drops hard to below 220 and you get PUT the naked Jan01/220 puts you sold.. I know, what are the chances of that happening... I don't know, BUT it's not zero... unless you want to throw some probabilistic measure on it.... and you have only limited your gain to 300/share at best and 80/share if both sides get exercised... not a terribly bad deal, but why limit your profits on CMGI when you can let it run... >For illustration purposes, let us set the scenario as follows: >buy 100 shares of CMGI at $ 218. >Sell 1 naked put Jan01/220 $ 91 >Sell 1 covered call Jan01/300 (not at this price yet) $ 127 >Cost basis: 100 sahres at $ 0. best regards amein

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