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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: BulbaMan who wrote (5138)	12/14/2001 12:06:46 PM
From: Cary Salsberg	Read Replies (3) \| Respond to of 52153

I just started reading this and the "Munch" thread the past few weeks. I am brand new to Biotech investing. In fact, I haven't done any. Since options are the subject, it seems, a priori, that Biotech could be a good area for way out of the money covered call writing. The future "potential" for a killing is always there, and that supports good call premiums. Do any of you have experience in Biotech covered call writing?

To: BulbaMan who wrote (5138)	12/14/2001 12:37:59 PM
From: Biomaven	Respond to of 52153

BulbaMan, I don't use options that often, but I have generally done well when I do use them. In normal circumstances the huge bid/ask spread will kill you, and so I only use them in special circumstances - mostly when I believe the implied volatility is way incorrect. I also sometimes hedge by selling calls on the BTK index if I think prices are out of hand. My PCYC options were well out-of-the-money and dirt cheap when I bought them. If I'd been holding a comparable amount of stock I would have lost real money. I do agree that people use options too often, though. Peter