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

To: JGoren who wrote (2666)	10/13/2001 11:55:56 AM
From: Andrew N. Cothran	Read Replies (1) \| Respond to of 5205

JGoren: "Any ideas what the market will do next week as options expire?" Instead of looking at the market, best to look at individual issues. Take QCOM for instance. The open interest on the October 50's is 22,888 (that's 2,288,200 shares). The open interest on the 45's is 20,332 (or 2,033,200 shares). My bet is that the MM'S and other hedgers will go after the 50's. The 45's are already in the bank. What I am saying is that every effort will be made to see that QCOM stays right at or slightly below 50 in order to kill the 2,2888,200 shares that are at issue. The move between now and Friday will be to maintain the stock price as close to the nearest option whose strike price has the highest open interest to insure that those options will expire worthless. I will test my theory on Monday by selling 20 of the October 50's at $2.00 or better if I can get it. Since this sale will be a covered one, If I get the sale off, I risk losing the stock at $50 unless I buy the call back if it looks like it will close above $50 by Friday's close. If I am right, I bank $4000 profit less commission for one week of worry.