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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (137540)	6/18/2001 12:37:20 PM
From: maui_dude	Read Replies (1) \| Respond to of 186894

GV, Re : "You have, however, completely eliminated the potential reward, outside whatever amount of money the strike price is." Sure, it would eliminate the potential reward over and above your strike price. But then, so what if it does, if you select a strike price appropriately (of course, you premium will be set appropriate and if the premium is too low, than only your broker benefits)? The way I see it is how well can you predict the stock price movement and then leveraging using options trading. Re : "For a stock like Intel, that amount is probably much smaller than the potential upside if things work well." So, you are making a prediction here that the likelyhood of INTC going up significantly in a very short time is very high (and/or the premiums are too low). And this is where some may disagree with you and decide to collect some premium instead. For all the wisdom about 'one should never time the market (and hence not invest accordingly)', I believe you have to predict the market to some extent. ANd if you are timing the market, what better way than to leverage than using options (even buying calls in some situations). Holding equity is just a very special case of covered calls (which gives you zero premium and that expires after infinity) and by not writing CC, you choose not to use many different options available to you. JMHO. -Maui.