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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Alias Shrugged who wrote (83409)	9/1/2000 12:01:38 PM
From: Knighty Tin	Read Replies (3) \| Respond to of 132070

Mike, I look for minimal downside relative to the premiums. So, I like to find a good co. whose stock is at or near a 52 week low, but whose fundamentals remain intact. Ancor at $25 was a perfect example. The return is not my key. The risk vs. the return is. For example, I would expect a lot less return from a call on ASA than I would from a call on BEAS. But they could be equally attractive if ASA was kicking out 25% a year and BEAS was kicking out 45% a year, standstill. So, it is really risk/reward and not just reward I focus on. Remember, a covered call write is really a cash secured short put and that is the preferred way to do the position outside an IRA. But downside is a key ingredient with short puts.