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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: Jonathan Thomas who wrote (12308)	2/3/2000 6:22:00 PM
From: Herm	Respond to of 14162

Hi Ryan, ROST finally woke up after the MMs robbed everyone blind. WOW! Take a look at the chart profile set to the daily prices. For those of you that get the free newsletter at coveredcalls.com will recognize the chart pattern. If you recall, the WINs technical indicator summary chart under pending gap spells out that the when the upper and lower BBs are very narrow, it is like a compressed coil spring ready to release. Gappers can go up or down. But, if you factor in other indicators like the super, super, low RSI and lower OBV, it was only a matter of time before this stock woke up. Clearly, there was more upside potential than downside slide. I had thoughts of the new ROST management jumping in and doing a buy back. It has been done before to counter bad street reactions. siliconinvestor.com ROST Potential? This stock remains an undervalued stock and a good CC workhorse. Although, the open interest at this point has been dead. In the past, I have noticed when companies do a buy back they pump money into the stock which forces the price up caused by a man made short squeeze which does not last long. ROST has a fairly slow float turnover (TRO) and does not light candles like the vipers. Yes, stocks jumps up fast when buy backs are announced and it draws attention. But, there is some massive ROST overhead price resistance at the $18-$20 level which must be satisfied. Because, the ROST open interest is low, I would be more inclined to short against the box when ROST hits that brick overhead. Meaning, rather than CCing (if there are any buyers) you can short a heck of great deal more ROST stock for some quick downside profits. Provided you are not margined on the long ROST stock, you could pick up a nice clip of stock to short since the margin requirements are fairly low. Looks like ROST is back in play!

To: Jonathan Thomas who wrote (12308)	2/3/2000 9:04:00 PM
From: Dan Duchardt	Read Replies (2) \| Respond to of 14162

Ryan, I may regret it in the morning, but I closed my long AUG15 calls before that final push at the end of the day. After I had purchased them and a few others, my IRA custodian decided it was too risky to hold long calls because of the remote possibility of having them automatically exercised if I didn't sell them before expiration. To keep the position, I had to have the strike price in cash in the account, meaning I had to commit even more money than a CC would have cost me. I made 1_3/16 on a 1_11/16 investment, but of course had to keep 15 in reserve. If I can catch a good price I'll probably go long and write some calls myself. I'm not seeing any valid prices on the MAR15s right now. MAY17_1/2 @ 1_3/16 look decent, especially if ROST runs higher before you have to write them. Good chance of that, and of ROST being up there in May. I covered some WCOM FEB50 on Monday when the stock ran on Monday, thinking I would roll out after about another 5. Jumped the gun on that one, so now I'm long WCOM uncovered with some regrets. Waiting for a serious rebound to write new calls. And I'm in KM too, with 2002JAN10 calls that I bought a bit too soon. You could buy those now for 2_7/8, and I think that's a great deal for anyone who can write calls against LEAPS. With a little patience, I'll bet you will be able to write a 12_1/2 for at least 2_7/8, and eventually work to a net credit while holding the LEAPS that could easily be worth 10 to 20 before expiration. Maybe KM will catch the fever soon. Dan