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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: Hunt who wrote (11648)	10/9/1999 10:36:00 AM
From: Casaubon	Read Replies (1) \| Respond to of 14162

Thanks Hunt (Mr. Hunt?). I have an interesting strategy question for the thread. Does anyone think it would be worthwhile to simply buy some stock and immediately write some long term covered calls. Then, using the timing techniques which Herm espouses, buy and sell an "equivalent" number of options with very short term timeframe in mind, using the original CC premiums to fund the process.

To: Hunt who wrote (11648)	10/9/1999 1:59:00 PM
From: Herm	Read Replies (2) \| Respond to of 14162

Thanks for your reply Hunt. We all have something we can contribute and I just know enough to keep myself out of trouble. :-) OPTION PRICES DIFFER FROM ONE EXCHANGE TO ANOTHER? Barron's, Michael Santoli, in the last week issue reported on a new system which simplifies option price comparison shopping. "Two weeks ago, a subsidiary of Timber Hill, one of the largest and most technologically sophisticated option market-making firms, formally launched a new system that allows a trader to find the market with the best price easily and achieve 'best execution' instantly. The firm intends to offer access to the system to "John Q. Public" quite soon at rather low cost - somewhere below $6.00 per trade and possibly a lot lower. For the moment, the exchanges themselves are constrained from forging a linkage of their own by an ongoing Justice Department antitrust investigation of listing practices, the continued existence of which is becoming increasingly moot given the flurry of competition of late. NEW AND MORE SENSIBLE MARGIN RULES FOR OPTIONS Again, Barron's reported "the new rules will lower margin requirements for stock positions hedged with options." So, CCers, that should help use out a great deal...... Currently, an investor with positions consisting of a stock and options is margined as if each component is owned separately rather than as part of a lower risk blended trade, often raising margin cost to excessive levels. Now holders of protective puts, conversions, collars and other such position will be charged only the margin commensurate with the relative safety of the trade. NOW HEAR THIS FANTASTIC BIT OF NEWS! For any WINs CCers with a good working knowledge of options and CCing, LEAP Calendar Spreads (CCing LEAPs)in which you use the LEAP as a surrogate for the stock because it is much cheaper, will love this bit of news. A new change involves allowing investors to borrow up to 25% of the market value of a long-term options (more than nine month out to expiration) So, LEAPs could become even cheaper to purchase and setup as profitable CC workhorses. NOTE - Not all brokerages will buy into that. I ask that all of you keep your eyes open for news at your brokerages about that margin access for LEAPs. Currently, LEAPs are an all cash deal. The new rules would give you more slack and leverage for this powerful combination. I love it!!!!