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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Night Writer who wrote (72950)	12/1/1999 1:22:00 PM
From: MeDroogies	Respond to of 97611

You are absolutely correct in your descriptions. However, alot of people don't believe these descriptions to be the case. They feel that if a stock is going to hover (say, CPQ at 25), then selling a covered call is NOT a short play since they are making money on the stock even if it (possibly) goes to 25 1/4. While the call can be executed, it isn't likely to be if it was bought far enough in advance and the buyer lost the premium. It's a very strange world, options-wise...but technically you're correct.

To: Night Writer who wrote (72950)	12/1/1999 1:27:00 PM
From: spy hard	Read Replies (3) \| Respond to of 97611

My personal problem with CPQ is that I know it will go up, but in a mean time it is costing me or saving me(depends how you look at it) a lot of money in oportunity costs. I think that is where frustration comes from. A lot of folks are looking at those companies that go from 30 to 300 and thinking it could be them. The truth of the matter is that even if we had more money from the sell of CPQ, finding those stocks is not easy. I have to work on my patience. I am getting better at it. At least I stopped buying OTC-BB stocks.

To: Night Writer who wrote (72950)	12/1/1999 2:18:00 PM
From: rudedog	Respond to of 97611

NW - Technically you are correct. However, there are degrees of "long" and "short". When you sell covered calls, all you will ever make is the premium, and you make that as long as the stock does not rise (much) over the strike. So it is much less bearish than buying puts, where the lower the stock goes, the more you make. There are of course considerably bolder short plays than that. I don't regard myself as a bear but I routinely sell covered calls... I personally would not sell LEAPs... but the notion of just buying the stock as the price passes through the strike seems like an OK hedge, if you have the money and are comfortable owning more of the underlying...