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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (79952)	4/21/2000 4:19:00 PM
From: Freedom Fighter	Read Replies (2) \| Respond to of 132070

Mike, Do you ever look at the Black Scholes theoretical value of an option when you are deciding whether the price is appropriate for the position you want to take for or against the underlying security? Do you look at the annualized percentage you are paying or receiving for the premium? Both? Other? It seems to me that for at the money calls you can sometimes receive an annualized return from selling calls and puts that is far above what you would expect by holding the stock. Occasionally I have flipped a stock back and forth for months by selling calls and puts. I received annualized premiums that worked out better than I would have expected from just holding the stock or cash. I limit it to stock positions that I like, but am not crazy about (for price reasons) during periods when I have no better use for the cash. It's more or less an experiment for me. If the stock keeps falling, I slowly get "put" into a position that I would have accumulated anyway. Perhaps I would be better off just trading the stock and avoiding commissions and options spreads, but the options seem to discipline my actions. Thoughts? Wayne