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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (72970)	3/2/2002 4:00:52 PM
From: Elmer	Read Replies (2) \| Respond to of 275872

Is that how it is? or is my understanding of the mechanics flawed. You're close. The options expire on the 3rd Saturday of the month they are written for, but because Friday is the last day they can trade we say they expire on the 3rd Friday. You are correct about the numbers. My cost is now $13.64. If they are called away at $15 I will make ($15/13.64)-1 or about 10% for 2 weeks. I will be perfectly happy if the share price drops and stays below $15, in which case the March options expire and I will write more CCs. This is my preferred outcome because as I said, I'm aiming for $0.35 per month, which is 2.5%. Another option(no pun intended) I have is to roll them out. I could buy them back Monday for ~$0.70 and sell the April $15 Calls for ~$1.40. That would bring me another $0.70 and lower my cost to $12.94. The $0.70 premium for April would represent $0.70/$14.09 or ~5% profit for April,twice my goal, and give me the potential for an additional $2.06 or 14.6% profit if I get assigned at $15. As I said, commissions are not significant and have very little affect of the numbers. EP

To: Bill Jackson who wrote (72970)	3/2/2002 5:37:49 PM
From: niceguy767	Read Replies (1) \| Respond to of 275872

Bill: "NG, So he made 45 cents on the calls that he sold. (Nope, they have to expire or you have to buy them back before you've made anything!!!) and he can be forced to sell those shares he bought at 14.09 for $15.00 eventhough they trade above that($15.15 or $1000.00)" You haven't "made" anything unless you've unravelled the position or the options have expired, neither of which, has yet to take place...As I understand it, Elmer hasn't unravelled the trade but is "wallowing" in his momentary onside position equating that with a profitable trade which iincidentally could become unprofitable with a $14 open on Monday morning...My point here is that Elmer keeps talking about all his winnings with this one trade when in fact the trade has not been unravelled...Nice to see him onside,though...It's been a long haul for him with that put writing strategy of the past couple of years where he got put AMD at $39 and INTC at $70!!!