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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: Greg Higgins who wrote (11332)	8/3/1999 12:48:00 PM
From: Night Writer	Read Replies (2) \| Respond to of 14162

Greg, I didn't mean to be condescending. I came to this thread looking for help and to make a contribution. I apologize for any comment appearing to be condescending. I understand selling the puts at $45 if you want to buy the stock. I don't understand how the buyer hedges by selling the lower puts. The act of buying the 45 strike puts is a hedge on the stock. Selling the 40 strike puts now puts the 45 strike buyer at risk. I don't understand why the 45 strike buyer would do this but I'm willing to learn. NW

To: Greg Higgins who wrote (11332)	8/3/1999 6:43:00 PM
From: OX	Read Replies (2) \| Respond to of 14162

Pardon the intrusion, this is really fascinating following everyone deciphering this possible CPQ spread play... > the MM who bought the 45's sold the 40s to lay off part of his risk It may be a little late in the day for me, but I wondering, if a specialist did do this to offset her position... who does she sell the 40's to? another specialist? In a case like this, if it wasn't a spread play, I would think the specialist would cover with shares. But I have no idea what I'm talking about, so I would love for someone to correct what I'm trying to say. also relevant to the CC thread, perhaps... beta.siliconinvestor.com beta.siliconinvestor.com

To: Greg Higgins who wrote (11332)	9/24/1999 11:15:00 AM
From: Greg Higgins	Read Replies (1) \| Respond to of 14162

I wrote: If you are confident CPQ would turn up by Jan, there are 3 ways to play it: 1) Buy the stock, 2) Buy the Calls 3) Sell deep in the money puts. .... I think a credible case can be made in this instance for solely selling the DITM puts for someone who is convinced they want to buy the stock. Well, I wasn't convinced that CPQ would turn up by January, but just for the heck of it, I sold one Jan 45 Put for 21 1/2 netting about 21 1/8 after commissions. I got assigned this AM. True to form, I have placed GTC orders to sell 1 Jan 22.5 Put @ 2 3/8 and one Jan 22.5 Call at 3 1/2. Assuming I get filled at these prices, come January one of three things will happen: 1) after expiration, I'll be long 200 shares with a nut of roughly 20 9/16, 2) after expiration, I'll be flat with a $373 profit on a $24 stock (the 100MA is just about $24) after 5 months, or 3) just before expiration, it'll be so close to 22 1/2 that I'll buy back the put and call and sell them both again 3 months or so out.