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To: rydad who wrote (29469)	8/18/2000 11:54:27 AM
From: jc2020	Read Replies (1) \| Respond to of 35685

Hi Rydad, I'm in bout the same boat with my ELON. As per my last post I did not do the right thing and buy back my calls when they dropped to 3/16 and re-write for additional premium on the way down. Could have done this twice in June-July month alone. I did re-write when options expired worthless on July 21 the Elon Aug 35 for 4.25. Last time I checked ELON was up a tad at 37+ and to buyback would cost me about 2.63. Sometime today I will buyback those Aug 35s. My cost in is similar to yours (slightly lower at about 55 if considering my premiums the last 2 months) So what I plan to do is buyback in the next couple of hours and re-write the calls but move out to November and add a few dollars to go OTM (say write the 45s or the 50s) and still get some return and maybe buy even more shares (alla V) and write them as well. Doesn't seem cost effective first to break the rollouts into a bunch of groups. Justs costs you more in commissions I think. Better to write 12 instead of 6 and 6. Go a little further out in time also. JMHO, someone else may see this differently. Good Luck. 2020

To: rydad who wrote (29469)	8/18/2000 4:15:18 PM
From: dwayanu	Respond to of 35685

Hi Rydad: I was trying to do a similar analysis as yours but I don't know how to estimate the future values of the Calls when I buy them back, or the future values of the calls when I re-sell again. Take a look at an ELON options chart, for example: options.nasdaq-amex.com`&selected=ELON ELON stock price $37 Sept 30 $8.75 Sept 35 $5.75 Sept 40 $3.62 Sept 45 $2.12 Figure out the current premium percentages for ATM and 20% ITM Sept calls. Sept 30 20% ITM, $7 intrinsic, $1.75 (5%) premium Sept 35 5% ITM, $2 intrinsic, $3.75 (10%) premium With one month to Sept expiration, 20% ITM premium is 5% and ATM premium looks like about 12%. Suppose you write Sept $40's now getting 3.60 (+ $3 intrinsic in stock value), and the stock then rises 35% from $37 to $50 tomorrow. Your $40's are now 20% ITM, so their value would be $10 intrinsic + $2.50 (5%) premium. Sept $50 call would be worth about $6 (12% premium). BTW, the above is a more or less breakeven play, gives you about a $10 increase per share plus tax loss versus $13 increase for just holding the shares long, and versus $6.60 for writing and allowing yourself to be called. ELON is a volatile stock, so it has a high volatility premium on the options, which means that when you go from ATM to OTM or ITM, the premium does not drop off as rapidly as more stable stocks. Try running the same 20% analysis on EXDS and QQQ for example. ELON is also a low priced stock, so the difference between strikes down here is 15% or so, e.g. $35 to $40. This makes it difficult in real life to catch the optimum percentages. WARNING Above does not take into account time decay. Stock popping up tomorrow is a lot different than stock gaining in value through mid-September. The premium as a percentage of the stock price, and the drop of this percentage as the stock price moves up or down and as time moves toward expiration, is what we're working with. Rolling out, trades the near-expiration small premium percentage for next month's much higher premium. Rolling up or down, trades the lesser ITM/OTM premium for the higher ATM premium. Buy writing ATM calls, receiving maximum premium percentage, you can profit from stock moves up or down and from the passage of time. Writing OTM, you are betting that the stock will stay below the strike. - Dwayanu