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

To: yard_man who wrote (89113)	2/1/2001 5:46:33 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Tip, Yes, the premium is fatter, but so is the stock price. I would much rather buy the stock at $14 1/2 and get less premium on the $17 1/2 call than wait for the stock to go up. Your cost is a net of stock price minus premium, and I think you'll find that the lower stock price is always the majority vote in that formula. So, buying the stock at $15 and selling the call at $3 gives you $12 all in cost. Buying at 17 1/2 and selling the same call at $4 gives you an all in cost of $13 1/2. And, in some very short term guerilla fighting income programs, that might be a good unwind of the earlier position. A $1 1/2 gain on $12 in a quick period of time is nothing to sneeze at.