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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Victoria Walley who wrote (164595)	4/6/2001 9:58:10 AM
From: hlsjones	Respond to of 176387

calendar spreads I'm writing short term calls on my leaps as well as stock. So yes, they are calendar spreads. I'm not doing what most people call calendar spreads but that's what they are. My play last week was buying 03-17.50s and selling the May 27.50s for a called return of about 12% and an uncalled return of 9.5 or so. Depending on how you look at it the worst case is that I'm forced to keep the 10s (poor me)and the best case is that I'm called in May. Of course I have an order in (GTC) to buy the 27.50s back at 1/2 to force me to keep them if Dell drops. Many brokers should allow you to do this. This trade was done at Mr. Stock but I have done similar trades at Etrade, Ameritrade and Salomon Smith Barney. Scott should let you do this unless you are in an IRA and some brokers will let you do them even then. Try to get to your branch manager and explain what you want to do. Unless he's backwards he should OK the trade. The key here is that the 10s are so far in the money that it's about as close to a sure thing as you can get. At least as safe as the stock and less money in the deal. Remember that you are reducing your cash position as soon as you sell the call so in the above deal, I bought the LEAPS at 17 and sold the Mays at 1.875 so all I really have in the LEAPS is 15.125. This makes my "Magic Number" 25.125. "Magic Number" is one of my trademarks & copyrights and is another discussion, but has been published in the July/August00 Explanations Newsletter. I can send you a copy if you contact me directly. The short of it though is that any combo that results in a "cash in" of more than my "Magic Number" will result in a profit. If I'm not called, my "Magic Number" just keeps dropping every time I write covered calls. There is a huge amount of discussion that can be started about CCs. I don't look at them the same way most do but I've made money almost every month for the past 2 years in these plays. In the few months I don't make money (read cash in), I'm just out of the market and I don't lose any either. Most people do not "USE" the stocks they own to create positive cash flow, they just sit and wait for the stocks to go up. B A D M O V E!!! I don't want to be in a position that only makes money if the stock moves one way. I want to take cash out of the market no matter what the stock does. Let me know if you really want to get into this. Good Trading