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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 (12859)	5/30/2000 1:23:00 AM
From: Richard James	Respond to of 14162

James Hopkins: Thanks again!! I might check out Waterhouse. Hope your's was a great Memorial Day Weekend. Richard James

To: James F. Hopkins who wrote (12859)	5/30/2000 4:10:00 PM
From: Richard James	Read Replies (1) \| Respond to of 14162

Jim: Looking deeper into your dividend capture strategy. (Confirmed that I can do protective puts with Dreyfus and MLDW, and I believe Fidelity, in IRA's) Neither E-trade not DLJ will allow it. What of buying 1000 RJR @ 27-1/4, writing 10 JAN01 20s @ 10-14. Div/Sr is $3.10. Quarterly is declared payable July 3 with an ex-div date of June 7. (Still have to check its Dividend History) Should receive 2 quarterly payments (totalling $1550) by expiration. Including fees and commissions, the ROI is 25.48% over slightly less than 7 months. The annualized yield is 41%. There is much risk than the MO play and the cost of puts precludes their use. I am going to run the numbers on doing a buy/write tomorrow and closing the position as soon as I have my dividend secured. Richard

To: James F. Hopkins who wrote (12859)	5/30/2000 7:38:00 PM
From: Richard James	Respond to of 14162

Found one big error in my RJR analysis. Completely misread the cost of puts. Can hedge with Jan01 20's for 1/2. Recomputing for closing price, looks like a 25.81% ROI, 40.4% annualized. Now if only my current brokers would let me buy protective puts in my IRA. (MSDW account is a taxable account) Guess I could go for it and buy naked puts in my E-Trade taxable account. Then if worse comes to worse I have a loss in my IRA and an offsetting, but taxable gain.