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

To: Uncle Frank who wrote (3354)	2/4/2002 9:12:22 AM
From: alburk	Read Replies (2) \| Respond to of 5205

GMST purchase strategy: Uncle Frank (or anyone else), I can’t remember if you got out of GMST. I am still intrigued with the company, especially at today’s price, but I am also very concerned about the ITC decision (regarding their patents). I am fiddling around with a hedged entry strategy-- Buy @18.13 (Friday’s close) Sell Covered Call May 25@1.15 Buy Put May 17.5@2.65 Upside is 30% gain (5.38 points) if stock runs after positive ITC outcome (25+1.15-2.65-18.12=5.38) Downside is 12% loss (2.12 points) and stock ownership at whatever price it settles if ITC outcome is negative (2.65-1.15+(18.12-17.50)=2.12). So if the stock dropped to say 10, the net cost under this strategy would be 12.12. I just wanted to run this by someone to see if I'm missing something. Plus I knew you follow (followed) GMST. Andy