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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: Bruce Ravelson who wrote (11108)	6/29/1999
From: Herm	Respond to of 14162

Keep you eyes on ENZN. It will eventually pull back. The chart sure does look like a pull back within the next two days at the most! A lost opportunity is a heck better than lost money. :-) There will always be other opportunities. Start with some other stock you own and your cost are lower than the current price. At least you have a margin of fat to work off for your first CC experience. Now, if you odd shares (210 shares or whatever) of stock and you want to dip into the margin by 15-20 percent to make up even lots of 100, go slow and use the CCing revenue to help pay for the extra shares. Eventually, you can become more assertive and be able to CC them up, down, and sideways. Don't get on a bronco unless you have several rounds of CC and you

To: Bruce Ravelson who wrote (11108)	6/29/1999 11:00:00 PM
From: stockycd	Respond to of 14162

Bruce, (Forgive me if I sound incoherent at this point. I've been up since 5 am.) It is my experience that if one is to write CC, one needs a little extra cash on hand. Let me explain. Say you bought ENZN @ 17. You write the AUG 20 calls. As long as ENZN stays below 20, you don't care. Now. If ENZN starts to rise (as it is doing) you have to decide what you want to do. Personnally, I would buy back my calls at the point in which most of the premium has been drained out of the calls. I have not looked at ENZN calls, but I would bet that point would be at a stock price of about 27-30. In other words, notice the option price movement and the stock price movement. As the stock price moves (upward) away from the strike price, the stock price increases in value, dollar for dollar, quicker than the call premium. There is a point at which the stock price and the option price gain at the same rates. That is the point where I would buy the calls back and write more calls for the just above the money strike. Until then, enjoy the premium rot. Here's a link that may help explain what I am trying to say. Message 9519520 Good luck! Chris