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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: James F. Hopkins who wrote (12820)	5/28/2000 10:48:00 AM
From: robwin	Read Replies (2) \| Respond to of 14162

Just a simple question on getting out of the stock prior to expiry of the covered calls... 1. As the stock goes up to say $30.00 and you wish to sell, will any profit on the sale be eaten up by having to buy back the calls at a higher price? Or do you wait until closer to expiration when the value of the calls has decreased?

To: James F. Hopkins who wrote (12820)	5/28/2000 3:29:00 PM
From: Dan Duchardt	Read Replies (2) \| Respond to of 14162

Jim, "Bragging" I have made money with both WCOM and KM even though I was wrong in both cases with my thinking they had made a bottom not much money but some ; in spite of the fact they both went down from the time I bought them my catching UP days and legging into the trades gave me enough advantage to over come their price drops. Heck I started with WCOM at 47..and still made money ! Legging in on Up momentum is over half the trick with covered calls but it can take one a little time to get the feel of it.. don't rush things just quietly wait until the mo mo flag is to the upside even if it's only a dead cat bounce. As long as we have caught you in a bragging mode <gg> I wonder if you would mind posting your trade dates and prices on one or both of these as examples of the timing and level of activity it takes to achieve your success. I think it would be instructive to all of us. Whether you choose to share the info or not, congrats on some good trading. Dan

To: James F. Hopkins who wrote (12820)	5/28/2000 6:57:00 PM
From: robwin	Read Replies (2) \| Respond to of 14162

Jim and Dan, thank you both for your insight and analysis. As a novice in CC writing, it takes awhile for things to sink in.. I have two queries: 1. Jim's effective dividend yield is increased by lowering his price in MO to the $9 area after writing the calls...but is this not only a temporary effect? Once the calls are covered or the stock called, are you not exactly where you started in terms of dollars and yield? Is the advantage that you can use the covered call proceeds to invest in something else during the period before covering or being called? Is it not a "zero sum" game? Excuse the question if the answer is obvious.. 2. I am in SUNW as i previously posted and was wondering if this made any sense for the short term...I am in for 400 shares at about 85 and the stock seems to have a short term range of 68 to 80....near 80, I sold 4 October 90 calls for $9.00....as the stock went back south to 70 I was able to buy them back at $6.50 (quick little profit over a few days)...I am now waiting for the price to run up again (hopefully) and write some more calls once the premium increases again...is this playing with fire? Robert