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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Barbara Jo Nigh who wrote (11039)	6/15/1999 11:52:00 PM
From: jw	Respond to of 14162

Generally yes, Barb. When stock is huggin' upper BB's and following resistant lines for last few hours/days. Watch it drop and hug lower BB's, maybe hit the last support point, and buy back. Wait for it to rise or sell puts and let it rise, buy back puts and repeat. I'm pretty new at the game but seems to work pretty good with R/T charts. I have IQC. $37.50 mo. Regards, /jw ps; Dell would be a good one to watch for a day or so to see what I mean.

To: Barbara Jo Nigh who wrote (11039)	6/16/1999 12:14:00 AM
From: Georgecc	Respond to of 14162

Barbara Jo, I think maybe you meant volatility instead of delta. The delta is the change in the option price for a 1 point change in the stock price. The delta is not important compared to looking at the price of the call as a percentage of the stock price, because this is your potential return on investment. The option price as a percentage of the stock price is closely related to the volatility, so yes, you want a high volatility (or you want it in proportion to your tolerance for risk, and your expectation of reward). You might also want to look at the beta of the stock itself which has a rough correlation to the volatility. Unfortunately beta is also one of the "greeks", so an options beta (not too important) is not the same thing as the stocks beta. An option close to at the money will usually have a delta around .5 or so, but the price could be a very small percentage of the stock price (low volatility stock) or as much as 10 to 15 percent (high volatility) for a near term option. -George