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Strategies & Market Trends : Option Spreads, Credit my Debit -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (1478)	6/4/2000 5:55:00 PM
From: Mark Z	Respond to of 2317

Here's what I decided to do...I'm going to buy back all the calls I'm short and sell 2002 leaps in their place. Why? This will yield me about 6 points now plus potentially 10 points in 2002. I started this whole thing last year when I first bought the SCH leaps when SCH tanked below 30 (pre-split) and at this point if I can get an additional 16 pts, its beyond my original profit target. I can then use the cash generated to open up a new series. Related is that all these options are worth 150 shares which gets messy + there will be times when a comparable 150 share option simply won't be available to sell at the strike I want for the month I want. So I can start a new series when SCH retraces using standard 100 share options. Obviously, if SCH never retraces and takes off as it did in early 1999 I'm SOL except that I'm long quite a few shares in my retirement acct so at least I'll benefit there. Plus I'll have the cash to look for other plays and can count on that 10 pts in January 2002 or maybe settle for 7 or 8 before then. One other thing...if SCH tanks between now & 1/2002 - and I consider this a very distinct possibility given how its traded the past year - I can always buy back those short leaps and wait to resell them again. OTOH, if the Fed is truly done tightening & signals such, we may not get any retracements like we saw last fall and this spring. Comments?