Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Newton Yuen who wrote (13787)	7/19/2001 8:14:49 AM
From: Herm	Read Replies (1) \| Respond to of 14162

Thanks Newton for that update. Sure, does look like you may need to take a second look at T. I always feel safer when I call that OCC office directly to get definitive answers. Some brokerages simply have too many young firecrackers that are not seasoned enough to deal with complex questions. So, I usually will get a second opinion if something sounds off. T</t> The weekly chart profile offers some clue as to the direction. There sure is overhead price resistance through out the $20s. Notice chart all of the folks that purchased T in the 20s before the meltdown to the low teens. The may be waiting to dump to break even. The volume is tapering off at this point. The saying "volume precedes price" holds true here. Some of the buying has been short covering. And, that buying is slowing down and the volume is tappering off even as T continues to move upwards. The current situation of the upper and lower BBs going in diverse direction indicates higher prices and higher volatility. Even the moving average has an upward bias. RSI is fairly high at 66 and climbing. In short, you are seeing a technical rebound for T. It will soon peter out and perhaps drive the stock sideways between a 20s price range. So, for T going out a few months and picking up 25s strike price would give you some upside additional potential. TWeekly Profile coveredcallswins.com[m,a]waclyymy[pd20,2][vc60][iUb14!La12,26,9!Lg] AWE has taken a beaten and can't get any lower. So, anything north is possible. AWEDaily Profile coveredcallswins.com[m,a]daclyymy[pd20,2][vc60][iUb14!La12,26,9!Lg]

To: Newton Yuen who wrote (13787)	7/19/2001 8:16:33 AM
From: Herm	Respond to of 14162

Thanks Newton for that update. Sure, does look like you may need to take a second look at T. I always feel safer when I call that OCC office directly to get definitive answers. Some brokerages simply have too many young firecrackers that are not seasoned enough to deal with complex questions. So, I usually will get a second opinion if something sounds off. T The weekly chart profile offers some clue as to the direction. There sure is overhead price resistance through out the $20s. Notice chart all of the folks that purchased T in the 20s before the meltdown to the low teens. The may be waiting to dump to break even. The volume is tapering off at this point. The saying "volume precedes price" holds true here. Some of the buying has been short covering. And, that buying is slowing down and the volume is petering off even as T continues to move upwards. The current situation of the upper and lower BBs going in diverse direction indicates higher prices and higher volatility. Even the moving average has an upward bias. RSI is fairly high at 66 and climbing. In short, you are seeing a technical rebound for T. It will soon peter out and perhaps drive the stock sideways between a 20s price range. So, for T going out a few months and picking up 25s strike price would give you some upside additional potential. T Weekly Profile coveredcallswins.com[m,a]waclyymy[pd20,2][vc60][iUb14!La12,26,9!Lg] AWE has taken a beaten and can't get any lower. So, anything north is possible. AWE Daily Profile coveredcallswins.com[m,a]daclyymy[pd20,2][vc60][iUb14!La12,26,9!Lg]

To: Newton Yuen who wrote (13787)	7/19/2001 11:05:06 PM
From: JGoren	Respond to of 14162

the post raises a concern for the many folks who are selling CC's on qcom. Qcom still maintains it will spinoff Spinco before September 30 (per IRS approval letter). Assuming the spinoff is to take place at the end of September, how is that going to affect calls sold for September or October? Is there a greater risk that the September calls will be exercised? Is there a greater risk for October calls sold before September 30? Does anyone have experience with the situation? An awful lot of the CC sellers are doing it for income and don't want to be subjected to exercise, btw. Any thoughts?

To: Newton Yuen who wrote (13787)	7/20/2001 8:22:04 PM
From: Howard R. Hansen	Read Replies (1) \| Respond to of 14162

So I guess we need to look for stocks like AT&T and reap a really easy profit by buying a call just before the issuance of new stock shares. Did the buyer of the AT&T 20 strike price call really get that good of a deal? I ask this because you didn't mention in your message what the buyer paid for the option. If he premium was $5.00 then both of you came out ahead. If the premium was $1.00 than he made a good buy. Furthermore when a company is going to have a spin off doesn't the CBOE normally open up two series of options? One for the underlying stock with the spin off and one for the underlying stock without the spin off. This is what the CBOE is doing with Lucent. Hence when you sold your covered call did you check to see which version of the option you were selling?