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

To: cfoe who wrote (1677)	7/30/2001 7:31:36 PM
From: Dr. Id	Respond to of 5205

P.S. Am leaving on 12-day vacation tomorrow and may not be back on SI until I return. So, I would appreciate any wisdom out there by tomorrow morning. PPS. FYI - I have not sold any AUG QCOM CCs yet. My leaning is to hold off for the stock to appreciate further this week. Somewhat OT response... Will you have internet access while on vacation? Why not cash out your long calls before you leave so you won't have to worry about anything while you're gone? (Isn't that the definition of "vacation"?):-) Dr.Id@justwondering.com

To: cfoe who wrote (1677)	7/30/2001 7:54:32 PM
From: BDR	Respond to of 5205

<<What is rate at which the time premium will deteriorate?>> Theta: Represents the loss in value an option will experience due to the passage of time. Theta is usually expressed on a per day basis. For example, if an option has a theta of 0.25, the option will lose about $0.25 a day, provided the underlying stock price and volatility hold constant. This site gives a theta of -0.08 (will lose 8 cents a day) for the Aug 60 calls: finance.lycos.com

To: cfoe who wrote (1677)	7/30/2001 8:19:26 PM
From: Kayaker	Read Replies (3) \| Respond to of 5205

What is rate at which the time premium will deteriorate? Note that the decay of time value is not linear. The closer you get to expiration, the greater the daily loss. $5.80 current vs $3.80 cost is a decent return. IMHO a common mistake with long (short term) calls is not exiting once you have a reasonable return. I would take da money and run.

To: cfoe who wrote (1677)	7/30/2001 9:53:03 PM
From: TShirtPrinter	Read Replies (1) \| Respond to of 5205

Greetings CFOE, Sell em and take the profit if you can't check em. Dale just gave you the proper explanation of Theta. Here's my take. If you are long, paid good $ for the option, it always goes down too fast. If you're short, the price wants to hang high way too long and never goes down fast enough. I agree on waiting for the QCOM to bounce just a bit more to sell CC's. Have a wonderful vacation and hurry back. We'll have the light on. Tony