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Strategies & Market Trends : LastShadow's Position Trading -- Ignore unavailable to you. Want to Upgrade?

To: SpecialK who wrote (38619)	9/28/2000 7:35:59 AM
From: Oral Roberts	Read Replies (1) \| Respond to of 43080

Nobody is forced to buy your calls. If the stock trades enough there are just buyers who are speculating that the price of the stock will rise pre expiration and there are people who are short the stock that don't want to cover and look at the calls as cheap insurance. Say your short XYZ since 75 and it now trades at 25. You don't want to cover and pay the short term gains but you realize the stock is due for a bounce. You buy 25 calls for 2 bucks and the stock rips to 32 your short only lost 2 dollars because the gain on your options made up for the rest. It's also possible to write covered calls and not have a buyer for them in some of the more lightly traded issues. All in all the person writing calls is going to make a lot more money in the long run then morons like me that are buying them:) Jeff Roberts