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To: Dr. David Gleitman who wrote (8125)	3/19/2000 12:43:00 AM
From: Jeffry K. Smith	Read Replies (1) \| Respond to of 35685

David, you didn't ask me, but that is exactly what I am doing - month by month. I own the stock long. Of course I could have also bought LEAPS DITM as a stock substitute and sold month to month options. What I do not have a good handle on is the strategy of selling longer term calls and buying them back on dips - if you play your sale this way I am not sure which is the better to sell - the shorter or longer term options. Best, Jeff Smith

To: Dr. David Gleitman who wrote (8125)	3/19/2000 5:06:00 AM
From: techguerrilla	Read Replies (2) \| Respond to of 35685

Call Premiums . . . . regarding time are generally related to square roots of remaining time. Think about that as a GENERAL premise! Under that general concept, one that is not perfect from situation to situation (i.e. specific stock's performance and recent volatility), to buy orsell a call 9 months out would attach a premium of only 50% more than to buy or sell a call 4 months out. Why? The square root of 9 is 3 and the square root of 4 is 2. That is one reason why buying (but not selling) calls 4 months out is pretty smooth. Under this concept they would carry a premium of twice as much as one month out. Why? The square root of 4 is 2 and the square root of 1 is 1. Remember Tom repeatedly suggesting buying July calls on QCOM in late January and early February? That idea is keyed somewhat to that premise. Within a given month of a short term call, look at the 30 days as being governed by the same concept. 3/5ths of the time decay in the last 25 days occurs in the last 9 days. Why? The square root of 9 is 3 and the square root of 25 is 5. This is all very general, but, basically, very fundamental. I just thought I'd throw it out. If anyone cares to correct me, I would appreciate it. I'm somewhat new to options, but understand their mathematics rather well. I have been teaching mathematics ever since I left the United States Department of Justice, Antitrust Division, 20 years ago. Just porchin', jmanhavana (I'll be in Cuba in a week--Q launches! Don't short it! Just a warning!)

To: Dr. David Gleitman who wrote (8125)	3/19/2000 5:50:00 AM
From: techguerrilla	Read Replies (1) \| Respond to of 35685

ELON April100's vs August100's Tom was not recommending selling August100's. I have only heard of him recommending selling far out calls to ward off margin calls. (The time decay on such sold calls does not operate as significantly early in the time period.) They can be bought back once the stock that dropped (prompting the margin call) returns to health. The debate that Tom and I had Friday was solely with respect to buying ELON August100's or, say, CREE September150's/160's. It's clear now Tom views the ELON mid-range play as a better one. Tom likes to sell covered calls one month out and receive heavier premiums. The calls to SELL are ELON April100's. The calls to BUY are ELON August100's. Compare the premiums: 12 vs. 31. They fit almost perfectly into the time decay square root concept. 31 divided by 12 is not much more than the square of 5 divided by the square root 1, the months remaining with respect to the two types of calls. The bottom line is that buying calls 4 or 5 months out is very good with respect to the mathematics behind time decay in options. One month: four months: nine months--square root of 1: square root of 4: square root of 9. As I see it, the only reason Tom has been veering away from advocating going farther out that 4 or 5 months is that it doesn't fit in well any more with these crazy market corrections and his resulting "time capsules." (Remember his advocating July QCOM calls a month or so ago?) Tom can correct me on any of this if he wants to do so. I don't intend to speak for him, but I think I have it straight. I hope I've been helpful. just porchin', jmanhavana (long on Q)