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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: Dan Duchardt who wrote (11545)	9/18/1999 11:46:00 AM
From: NateC	Respond to of 14162

Well...I'm not HERM...not by a long shot......but I wouldn't be totally surprised if he didn't say........use WINS....and sell the January 5. That locks in profit, and protects your downside. The first time I tried to contrast this deep ITM approach to my more "profit oriented", higher risk OTM approach...I didn't like it....but after lurking for the better part of a year, and selling OTM CC's on a couple of true VIPERS.....I understand it. (Well maybe he'd sell the 7.5....the 5 might be overdoing the ITM part) at close yesterday Jan 00 5's were selling for 4 (bid) and the 7.5's were bid at 2 1/16

To: Dan Duchardt who wrote (11545)	9/19/1999 4:55:00 AM
From: Mike T.	Read Replies (2) \| Respond to of 14162

Dan, The main reason for going for the Oct. 7.5's is I'm anticipating a possible dump on this stock, but I don't want to risk selling out too many months, and locking myself in. I've seen this stock retreat to 7 and below in a heart beat. You're right about gaining only a 1/4 point by selling the calls and losing out if the stock creeps over 9, but I think it's hit overhead resistance (Herm thinks it's at 10). Now, I could just sell the stock, and then wait for it to come back down to a level where I could buy it again. If I'm playing WIN's right, though, I'm anticipating that the stock will come down in October, and I may not even be called out. The beauty of WIN's is that you don't have to pay attention to the stock market. I'm willing to give up profit, if I get back time in return. By selling ITM calls one to three or more months out, I don't have to monitor the stock everyday. I can just look at performance twice a week (just to cover myself if I want to do some sideshow action). BTW, My record for not being called out on an ITM call is 3/8 of a point. (My record for being called out on an OTM call is 2 points! - I have no idea what happened in that transaction, but I was happy to reap the profits). I hope that explains my strategy (courtesy of much help from Herm and this forum). I'm conservative, but I've been making 50-100% annual return on my investments, so no complaints here. Mike P.S. to Nate: The only reason I didn't sell the Jan 5's (or even the Nov. 5's) is that I don't think the stock's going to retreat that low, meaning I will definitely lock my profits in at whatever the calls are going for. In this case, as of Friday's prices, I think each of these calls were going for around 3-3/4, locking my profit in at 1-3/4 per share. With the 7.5's, my profit is guaranteed at 2 per share (if called out), and 1-1/2 if not. P.S. to Herm: I don't know about going farther out than October. I admitedly use my gut (along with WINS) in the stock market, and I'm definitely using it here. If the Nov. 7.5's had offered more return, I would have jumped on them.