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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (5639)	8/30/1999 7:07:00 PM
From: edamo	Read Replies (2) \| Respond to of 54805

g.moore..."fido" not sure what this canine entity is... when you buy a call contract it allows you the same privilege as owning the underlying. you can write a higher strike or different expiration call against it....why, because you can exercise at any time and convert to common....e.g...buy the 0250 @ 69........sell the 02100 @ 50...net out of pocket for the spread is 19.....the position is married together..if rmbs at or above 100 in 02, the 100 gets called and you exercise the 50....same as buy 50 sell 100=50 profit-19 prem=31 net against out of pocket cash of 19. shorting against the box in essence locks the stock you own at the level you short at...doesn't make much sense, might as well blow out the position. i feel the same way about buying puts for insurance...better to sell covered calls or sell the underlying if you fear down trend.... i would never buy otm...atm,itm shallow or deep depends on the assigned volatility of the stock. look at pfe and mo...both about 38...0230 for pfe @16, for mo @ 12....pfe has a higher volatility factor assigned to it...or the perception of how the stock will perform based on its current high/low range. varies from stock to stock....but why buy on margin, when you can buy mo or pfe for 15-20% prem for 2002 performance? if your canine broker will not allow to to write calls against calls, i doubt they would even know what put selling is....they prefer the gravy train over you.... have you read harrison roth "leaps"??? would suggest it...