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To: Len who wrote (5663)	2/29/2000 4:51:00 PM
From: J.B.C.	Read Replies (2) \| Respond to of 35685

Not sure what you mean about "rolling" the contracts. In my referenced post on SEBL, I basically bought the stock today at 142.25 and guaranteed "someone" that I would sell him those shares on March 18th for 148.25 ( the strike price (135) + the call option price (13.25)). 3 things could happen, and in most cases the advantage goes to the call seller. 1- The price continues to go up beyond 148.25....in this case so what for me, I've made my promise that I would sell my shares to someone and I make my money. 2- The price closes on Friday, March 17th between 135 & 148 .25 , This one offers me great leverage because someone has already "paid" me 148.25, during options Friday I can decide to let my shares be called away, or I can buy back my call contract for less than someone has paid me, I get to keep the stock and I get to keep some spare change from the delta on the call option. Let's say the stock on that Friday is trading around 140.25 (to keep it simple), the call option will be worth about 5.25, someone paid me 13.25 for them so I could buy them back and make $8 AND keep the shares. 3- This is the riskiest for the call seller... The stock trades and closes on options Friday below 135. I'll keep the stock and my cost basis is reduced to 129 (142.25 - 13.25). The stock could "tank" , however this is a risk that you have on any security. If the stock does close below 135 on March 17th, I now have shares that I could sell cc's again for an April expiration. There is no need to "roll" the strike price upward if the price of the stock goes up, you've already guaranteed that you'll make your money, you just are not participating on that rally. The above discussion does not include commission costs, and this is a factor, these usually do not work out this way if you're using a "full-service" broker. For a greater understanding, you may want to do some reading, my teaching came from reading: OPTIONS AS A STARTEGIC INVESTMENT by Lawrence McMillan. Jim