Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The Critical Investing Workshop -- Ignore unavailable to you. Want to Upgrade?

To: SE who wrote (29921)	8/21/2000 11:03:26 AM
From: synchro_fan	Read Replies (1) \| Respond to of 35685

SE: I AM GETTING A HEADACHE TRYING TO READ THIS as Voltage has PMed at times when I get way too complicated. I think CCs are suppose to be stress free. This sounds too confusing. Here is what I do: I buy the stock and sell the call ATM. I go away from the puter and come back just before expiration Friday UNLESS I have read that there is something extraordinary happening with the stock like maybe JDSU is buying it or somethin. Then if there is no time left and the stock might be rising, then I MAY(and it is just a may buy it back for pennies. I never buy it back if it should rise as this is playing the casino because you can buy it back and sell it again and buy it back and sell it. Crap shoot, I think. Just the way I do it and make money and try different vehicles. Syncie

To: SE who wrote (29921)	8/21/2000 11:15:36 AM
From: RocketMan	Read Replies (2) \| Respond to of 35685

Having worked through some examples, and reading a lot of what others have written, it appears that 10%-15% movements in the price of the underlying is a good rule of thumb for when to roll up and out (if the underlying is going up), or buy back and resell (if it is going down). Rolling up and out has no downside, and gives you 1/3 or so of the upside appreciation, but buying back and reselling has the risk of a fast reversal and the stock flying away from you, leaving you stranded with a loss. Not as big of a loss as if you held the common, but a loss nonetheless. Anyone agree/disagree?