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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: bacchus_ii who wrote (37962)	5/1/2001 11:50:41 AM
From: Gopher Broke	Respond to of 275872

I actually wrote the May $27.5 covered calls (not the $25 I mentioned) so there was a time premium on them of about $1. My logic was as follows. Rather than just having the cash burning a hole in my pocket (and probably doing something stupid with it like buying more calls) I have it locked into the covered AMD shares. If AMD remains above $27.5 for the next 3 weeks then the shares are called and I am back with the cash giving me about a 3% gain on the capital over the period. If AMD is at or a little below $27.5 at expiry then I am happy to be long the shares at that level. And if AMD is substantially below $27.5 at expiry then I sell some of the shares, buy call options and milk this baby again. I don't know whether this position is technically short or long :)