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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: NateC who wrote (11668)	10/14/1999 8:07:00 PM
From: NateC	Read Replies (1) \| Respond to of 14162

2 Things. first....I used to be able to click Netscape on this forum's URL...and then the first time I wanted to respond to a message...instead of just lurking...it would prompt me for my name and password. Now SI kicks me out to a login...and I have to find my way back to this forum. Anyone else have that problem?? 2nd...relates to the LEAPS calendar spreads we've been talking about....and I seem to recall a pretty good exchange on this about 6 months ago....if anyone wants to check Dick Hickman's index..... If an investor is Long a LEAPS call....say at Strike Price 40.....Jan 2001......and CC's the stock at 35......and then the stock takes off that particular month...before and up to the expiration date of the short CC.........and you don't buy back the CC....and it gets assigned at expiry......Do you just have the Long LEAPS call exercised at Strike Price 40, in order to cover the exercise on the CC???? I thought that was what happened. SO....if the Stock is at 37 let's say, when the CC is exercised......the long Call would be exercised also. (so you'd be forced to buy the stock at 40, when its market price is 37??) to give the shares theoretically anyway to the CC buyer at 35 Conversely...if the Long LEAPS call is ITM.....say the stock advances to 43..........and you let your CC get exercised at 35. Your LEAPS call is ITM $3, plus some time premium, say $10 or more. What happens here.?? (I've not let this happen with any of my calendar spreads yet..so haven't learned by experience).... They exercise my CC, and have to have shares to cover that exercise. Dreyfus and AMeritrade I know will call..and ask what the investor wants to do......but the "default" is to exercise the Long Call at $40.....Who gets the $3 difference between the strike price..and the market price of the shares on the day of expiry??? sorry this is convoluted....but I've never understood what happens in this scenario

To: NateC who wrote (11668)	10/18/1999 11:57:00 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Thanks Nate for that update on CCing LEAP. You did a very nice series of defensive repairs with your LEAP stock position! After that bout, you can handle just about anything the market can throw at you and still survive. It would thrill me to hear all of our lurkers and readers are able to doing exactly what you had to do and execute it perfectly. This is not rocket science theory or hype. It is barebones defensive survival techniques. Every person can learn this and survive to capture the market turnaround. You earn the CC Cowbow award Nate! Ride Em and now make that profit on the rebound. You will most likely see an extended sideways period of time. So, you could go out more months on those CCs and perhaps average down by adding more LEAPs to the pot. Looks like you are on your way to perhaps a 100%+ ROI in a years worth of time as those LEAPs just keep generating CC income over and over. Question? Do you leg into the CCs against the LEAPs? What is the process for you to setup the spread at your brokerage. That is another area I need to write about for the CD project. By the way, I registered my domain name(s) last week, secured a business web site, applied for the trade mark registration, and banged out a new web page design. The features will be very clean and informative. New lurkers can download the free WINs PowerPoint presentation to learn how to CC dance like Nate shared with us. webbindustries.com