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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: David Wright who wrote (11261)	7/20/1999 3:32:00 PM
From: tuck	Read Replies (1) \| Respond to of 14162

David, You're likely correct that the MMs go on the theory that no one would care that much to arbitrage these puppies. On the other hand, there is some volume today: two orders of 10 contracts apiece. So they have had to do some pricing today. Although the technical indicators do not as yet show an upturn, they seem to indicate we're near a short term bottom (it is rare for the RSI and stochastics to remain flat for long on this one, and they are at historic low points, i.e. it seems they could turn up any time now). I am thinking of risk/reward now. I don't see it going too much lower, while it could easily snap back and wipe out the sideshow. If it does go lower, it will be appropriate to roll the August 12.5 calls to August 10s, since the former won't have much TP left in 'em. The cash so generated can buy back a couple of the long and deep calls that I have on half my position. Thus a quarter of it would be naked (that is uncovered long stock) in anticipation of runup or dead cat bounce. Anyway, my lesson is this: if ever I again do sideshow puts, I'll buy 'em in the money and just buy less of 'em. The time premium of the OTM puts just evaporates too fast, and is not worth paying for. Cheers, Tuck