Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: Voltaire who wrote (9513)	3/28/2000 3:16:00 PM
From: stomper	Read Replies (1) \| Respond to of 35685

Speaks perfectly to the beauty of writing on G&k's. Wonder how he defines "small gain"? -dave

To: Voltaire who wrote (9513)	3/28/2000 3:28:00 PM
From: Jeffry K. Smith	Respond to of 35685

OH come on!! In a severe market breakdown the price of the call you sold might actually expand as volatility can make calls more expensive. Sure, after a point the calls go up in price (relative to the drop taken as a result of the common being lower), as it is recognized that the "dip" in the market is too severe and things will bounce back. BUT - can one say that if a stock is at $100, and the 105's are selling for $10, that if the stock goes to $80, that while it is at $80 somehow the option will be selling for >$10 ??? Give me a break. Of course, the 105 call will drop in price, and when the bottom is hit, "oversold", the option will go up (relatively ) in price because the market recognizes the oversold condition. If you own stock, what protects you from the downside, except ownership of puts? Nothing. What a nut this Cramer is. Best, Jeff Smith

To: Voltaire who wrote (9513)	3/28/2000 3:35:00 PM
From: Len	Respond to of 35685

Is Cramer talking about Covered or Naked Calls. With what little I know I would assume naked calls are much riskier. And, we all suffer if there is a major market downdraft. But, I am missing his point that there is no downside protection. Len

To: Voltaire who wrote (9513)	3/28/2000 3:35:00 PM
From: bobkansas	Respond to of 35685

Interesting post! Let's see, Cramer is against covered calls. Cramer is usually wrong about most things. Cramer is thus wrong about cc's. Secondly, Cramer says he has done covered call writing "hundreds of times" and yet says doing such is stupid. His logic runs in circles. Why is he engaging in such behavior? Words and actions do not connect. What a fruitcake of a guy. Best regards, Bob

To: Voltaire who wrote (9513)	3/28/2000 3:42:00 PM
From: abuelita	Read Replies (1) \| Respond to of 35685

I saw that article earlier in the day and my first reaction was "This guy has no idea what stress free living is all about". I still hold that view. Actually, I don't know what stress free living is yet either because I'm in the middle of transferring my account from one broker to another - kind of in limbo for a week or two. But I'm going to find out soon enough. So, I'll just thank you in advance Voltaire. Maybe I'll be able to return the favour with heaps and heaps of Dungeness crab? Thanks kindly, Rose

To: Voltaire who wrote (9513)	3/28/2000 3:56:00 PM
From: Jim Willie CB	Respond to of 35685

options puts owned and held offer bigger downside protection but they require money laid out and committed when a written call expires worthless, it saves you roughly 10% assuming atmoney call for nearby month and that savings is pretax an option put bought with 5% might quadruple on a big selloff e.g. April JDSU puts at 290 bought the instant it touched 300 would have been 350-420% gainers... so if you invested 5% of JDSU share price, you walk with 20-25% savings... this is an argument for more extreme sichiations though I agree with Volt covered call approaches except in two cases: 1. stocks like QCOM with explosive upmoves imminent 2. most big growth stocks for months Jan, April, July, October (for these, just pull margin cash out... install no ball & chain) / Jim

To: Voltaire who wrote (9513)	3/31/2000 8:06:00 PM
From: elpolvo	Read Replies (2) \| Respond to of 35685

POLVO BEANO's BEEN BAD (update)- 3-31-2000 i bought back my ELON april95 CCs just before the market closed today. (never buy back the covered calls) so why did i do it? greedy i guess. i sold them at 10 1/2 last week, i bought them back at 2 5/8. i thought maybe i could sell some more ATM CCs next week when they go back up and thereby do a little double dipping on the same vehicle for the month... in landlord speak it's like... "ok, the guy moved out, i cancelled the lease, kept the deposit, and i'm going to lease again to expiration." meanwhile, (and not that i'm going to do it mind you - because i'm strictly a guinea beano boy now and would never stray from the beano plan - i'm here for the quality of life gig) what's a good way to profit on the rise as they go back up? buy calls? what about selling puts - what is selling puts as opposed to buying them. any comments or ideas? -polvie beano