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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Seeker of Truth who wrote (437)	5/7/2001 12:46:41 AM
From: Uncle Frank	Read Replies (3) \| Respond to of 5205

>> Currently I am out of SEBL, thinking 47 is too high a price but I am selling puts on it at 40, thinking that 40 MIGHT be acceptable. I am also selling puts for June at 35 thinking that's still more acceptable. You feel 47 is too high, but are willing to get the stock put to you at 40, which, considering that May 40 puts only command an .85 premium, is only 16.7% lower. That's a pretty tight trading range in today's volatile market, Malcolm. The danger is that if sebl took one of its larger dips, you could find yourself very underwater. Does a .85 premium justify that risk? Even June 35s only get 1.35. But writing puts is a whole 'nother science, and I must admit that I don't understand that game very well. duf