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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: Herm who wrote (11851)	11/18/1999 12:48:00 PM
From: cowboyfan	Respond to of 14162

ROST.. I don't own any but was looking and maybe buying as it's close to a lower BB tag..

To: Herm who wrote (11851)	11/18/1999 5:12:00 PM
From: Alastair McIntosh	Read Replies (1) \| Respond to of 14162

Herm, I have a question about the covered call calculator. I downloaded the demo version for quick look. You seem to calculate the ROI on the cost of the stock, not on the net cost of the investment and are therefore understating the ROI. For example, a purchase of stock for $10.00 with a $10.00 strike with an option price of $2.00 shows a ROI of 20%. Based on a net cost of $8.00 for the buy-write the ROI should be 25%. Comments? Al

To: Herm who wrote (11851)	11/18/1999 7:32:00 PM
From: Dave Pestle	Read Replies (2) \| Respond to of 14162

Hi Herm. I have lurked around here for awhile, visited the web sites you've mentioned and I have seen your presentation on WINS, but I still don't seem to understand some of the basics. For example, if it looks like a stock has peaked, it is recommended to sell CC's at or deep in the money. I had always thought it was best to sell CC's on a stock that was in a slight uptrend. The opposite seems to be the recommendation- if a stock is about to bottom, CC's should be covered. I guess I'm not seeing the big picture here or something. Thanks, Dave

To: Herm who wrote (11851)	11/19/1999 5:44:00 AM
From: Bill/WA	Read Replies (1) \| Respond to of 14162

Herm, "Is there a way out?" On 7/9, with NTAP (Network Appliances) at $63, I sold 2 Dec65 CC's (NJQ-LM) for 8 3/8. My broker suggested buying 2 Dec50 Puts (NJQ-XJ) for 4 5/8 at the same time with the proceeds to "protect my downside"? Now, with NTAP at 118+, the CC's are at 50+ and the puts are at 9/16. iqc.com After much reading (and apparently too late), I fail to see how these puts are going to protect my "downside". As I see it, in order not to lose the 200 shares, my options are: Puts expire worthless / Buy back the calls or roll them up to Mar120's (NJQ-CD @ 20 1/4) or June120's (NJQ-FD @ 24 3/8) and hope for the best. BTW, NTAP will split 2 for 1 on Dec 20. As always, thanks for your thoughts and help, Bill/WA