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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (42984)	3/3/2001 2:11:12 PM
From: Jerome	Respond to of 70976

playing the range is just fine until the range changes. For example. Each time AMAT gets to 50 or 51 you buy some puts betting that it will return to the low 40's. At the same time you are buying the puts I'm buying a 50 call and getting paid for it. If AMAT jumps to 60 your put gets washed out whereas by call gives me the full profit of the call. I don't mind getting called out because that would mean that every month I would have more and more capital to work with.Just think what your portfolio would look like, if every single month you had more money to work with. The downside of the call writing is that You do a 50 call on AMAT and buy the end of the month AMAT is at 30. But at any rate you have a plan. And having a plan is more than half the battle. Jerome

To: Jacob Snyder who wrote (42984)	3/3/2001 9:33:29 PM
From: Shoibal Datta	Respond to of 70976

Jacob, There's nothing to stop you from buying back the calls if the write went against you (similar to the stops you initiate when you go short). Given that you are shorting, you are not averse to short term trading. Also, if you know that you are at risk of being called on a covered write, you can always buy an equivalent amount of stock before assigned. That way you don't lose out on any appreciation. What I really like about the covered call business is it is more predictable in terms of raising capital - yet it is not a blind bet.