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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Marvin Mansky who wrote (35396)	12/14/1999 10:58:00 PM
From: Dr. David Gleitman	Read Replies (2) \| Respond to of 41369

good evening Marvin. Today's market response came with mixed feelings. On one hand, and for selfish purposes, I was glad to see AOL go below 90 and accelerate the deterioration of the valuation of the December 90 calls. I still think that there is a chance then AOL will close below 90 by options expiration. If this is not the case, my exit strategy will be to buy back the calls and perhaps roll them into the January 105. One thing which I noticed with interest was watching the percentage of deterioration between the December 90 and the January 105 calls. Because of the close proximation to the December expiration date, the December '90s were deteriorating at a much greater rate than the January 105 calls. Perhaps I am stating the obvious, but this becomes all part of a lesson of life experiences when learning to deal of the benefits/pitfalls of options trading. Last month I "lost" a considerable amount of additional potential profits by selling the covered calls for brcm and qcom. I really can't complain, because I still made a profit on it however I did lose approximately 50 K. of additional profits because of the self-imposed ceiling that was placed by the covered calls. Perhaps whether most difficult parts of being involved in stock is to decide when to sell. Many times I feel that I don't want to sell a stock because I may end up with "too much" short-term capital gains which would in effect end up being apportioned to the government in the form of taxes (my uninvited partner). However there becomes this point of where to sell which is usually far below the optimized profit levels because of disgust with the turn of events for that particular issue at that particular time. How many times have we vascilated in deciding what to sell a stock only to sell it at a much lower valuation only after feeling disgusted with what could've been made. I guess I'm trying to say is that on one hand for some strange illogical reason, I would rather take the profits from the premiums generated by short-term covered option calls thereby avoiding having to guess where the top is of any given stock. As long as the fundamentals remain in place, and the market sentiment remains positive, the covered calls seems to be the way to earn additional revenue. All I can say is that there's a lot to learn and at times IM paying one hell of a tuition for these lessons. Feedback and insights would be welcome. Best of luck to all, David