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

To: rydad who wrote (3268)	1/17/2002 11:32:49 AM
From: Dominick	Read Replies (3) \| Respond to of 5205

What happens to the leap if QCOM goes down? IF QCOM drops, the leap will also fall. The degree of drop for the leap depends on its delta. I think the delta for Dale's leap is around .80. Meaning for every point QCOM drops the leap should fall only 80 cents. The point I was trying to get across was the amount of funds used. If the stock fell to zero he would be out $22 less the amount he received for the call he sold as opposed to being out $46 for buying the stock. If everything is going along fine, he would recover his costs basis, ($22), quicker than he would $46. This is just my view of it, Dominick