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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (34685)	3/26/2001 10:25:02 PM
From: Percival 917	Read Replies (1) \| Respond to of 65232

Hello Uncle FranQ, Long time no talk to. I have a question regarding your covered call writing on the Q. Reading through your sells it looks like an excellent plan but with one caveat...Is Q's price stable enough for continued writing month to month? In this crazy market what has seemed to be the "bottom" for many of our favorite stocks has turned out not to be. All it would take is a major surprise against the Q and the share price could be halved, more than negating the premiums you get from the CC sells. Am I missing something here? Regards to Aunt Nancy and my best to you, Joel

To: Uncle Frank who wrote (34685)	3/27/2001 9:23:20 AM
From: im a survivor	Respond to of 65232

<<This isn't a safe time to buy calls or even LEAPS>> I agree with that 110%...the uncertainty makes it tough......leaps and calls are a mans best friend in an up market. This is not an up market. They are a mans worst enemy in a down market.....leaps and calls will deteriorate, just like the stock, but the stock aint gonna expire, or you wont be forced to sell for pennies on the dollar prior to expiration.....stock, at least you can sit on....and if it's a good company, will hopefully one day come back. i read an article in one of the major financial rags recently and the article dealt with the next wave of folks that are going to get creamed in the market......the author specifically was talking about people that are calling this a bottom and buying calls/leaps to better leverage themselves and hopefully make up their losses quicker. the author points out exactly what i said earlier....we just dont know how low we go...when we rise, or how high we rise....sure, we could be past the bottoming process and sure, we could start the next bull run, in which case leaps would be great, BUT, what are the real chances this is happening now?? I could care less about the 3rd rate cut...big deal.....history does not always repeat, and this past year better have taught us all that valuable lesson. Other then rate cuts, I see nothing to cause a sustainable rally......even all the shorts and sideline money......the shorts will come back and tear into any rally...the sideline money is scared and will not re-eneter to stay, until a certain bottom has been set and a certain bull leg has begun again.....The only thing I see getting the bull back to stay for awhile is very simple...earnings and forward guidance.....instead of companies missing numbers and lowering guidance, we need to see them beating numbers, growth rates come back, and future guidance improve. When will this happen? Certainly not in the next couple qrtrs and maybe a good while longer....and if thats the case, call buyers and leap buyers that are not using tight stops, could get creamed....additionally, tight stops are not what they used to be...some of my biggest losses came on calls ( some stock) that closed at one price...something bad happened and they opened like 50+% lower or more.....and with the volatility present, setting a 10% stop loss...well, you may as well just flush that 10% down the toilet and save some time...you know very well, a tight stop will be taken out........anyway, just my opinion.....I too have been loking at leaps as a possible means of better leveraging my $$'s, but in this market, that is a scary proposition.....personally, I'd rather just buy ntap at $20 and watch it drop to 410, not worrying one bit cause I know that when the bear leaves, she comes back....but to spend $10 on leaps in this market.....uggg, very scary if things dont turn around........ Keith