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To: Jill who wrote (5703)	3/28/2000 9:25:00 PM
From: PAL	Read Replies (4) \| Respond to of 8096

Jill: Although I have not written many CC, I can now appreciate Voltaire's approach in CC. He likes to bat singles or doubles and stick with that strategy. It does not matter if the stock runs to the sky because he sticks with his original intention: monthly return. I belive this is his approach: buy the stock and use margin to get leverage (careful not to be overextended), then sell CC and if the stock is called, so be it, you get the return as planned. If not, the cost basis is reduced: repeat the process. This is called the cookie cutter approach, i.e. make the same cookie over and over again. Let us give an example (all today's prices): - you have $ 13,000. - Buy 200 shares of JDSU on margin at $ 130. - Sell CC April 135 at 8, collect 200 x $ 8 = $ 1,600. - In 4 weeks if called then you keep that $ 1,600 plus 200 x ( 135 - 130)= $ 1,000 for a total $ 2,600 - that is a return of 20% in 4 weeks on a $ 13,000 investment. That is not bad at all. What about if the stock runs to the roof. Well, it does not matter if your intention is to get that handsome return in a short period. It is mindboggling to annualize that. Remember that I am using real today's prices (sans commission). If not called, then do it again for May, the cost basis is henceforth reduced. ____________________________________________________________ Why are people nervous of the possibility of losing the stock? Mainly becuase they bought the stock long time ago as a Buy and Hold portfolio. When you see the stock zooms, that B&H will vanish. there is a unpleasantness of losing something you really treasure. That's why we start looking for repair strategy to hang on the stock. On the other hand, if you just now buy the stock for the purpose of getting a 20% monthly return as illustarted above, you don't care if jdsu goes to 200 in the next 4 weeks. The idea is to stick with the original strategy of hitting singles or doubles, and shouldn't have any regret that you could have hit a home run against that fastball. Best regards Paul