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: Paul Heye Jr. who wrote (649)	3/11/1997 11:38:00 PM
From: Herman J. Matos	of 14162

WOW, you have been sitting on that baby for a while! I rode USRX up from $60 to $80 and back down to $56 and still have a break even! I'm amazed I still have my shirt. I did not want to eat a loss on this highly explusive stock because I think their new modem is going to make big bucks. The 3com merger is even better. Hummm, you need to sell the covered calls as the stock is heading down so the premies will erode. The result is that you start lowering your net cost basis by going out a few months and lower strike price like you indicated. But, the stock is starting to show some strength again. Better approach now would be to find out when the next earnings report is due before you do anything. The stock may start to rise for you so you may not have to go so deep in the money. STAY ABOVE YOUR NET COST BASIS on the strike price!

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