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

To: andreas_wonisch who wrote (73049)	3/3/2002 10:34:58 AM
From: bacchus_ii	Read Replies (3) \| Respond to of 275872

RE:"BTW, Elmer's strategy has many flaws IMO..." I agree with you on those remarks. After having used this strategy for almost 2 years, I would add those observations: 1) This technique reduce lever for playing the market. 2) The most frustrating part is when you have such position (short put or CC) you lost freedom of trading the shares. It's the reason I couldn't jump in when AMD was below $8, a lifetime missing opportunity. 3) The best advantage is you don't need money in your account to make initial position(selling PUT). You need margin from other position though (e.g. bond position). Gottfried

To: andreas_wonisch who wrote (73049)	3/3/2002 11:48:31 AM
From: Elmer	Read Replies (1) \| Respond to of 275872

BTW, Elmer's strategy has many flaws IMO: In AMD's case the stock could go down a lot more ($8-10 seems to be the bottom of AMD's trading range) and he would lose up to 40% of his initial investment. Excuse me but this is rather foorly thought out. Why would I lose by simply holding the equities? Would I somehow lose less if I hadn't sold the CCs? Do you think AMD will go below $10 and never ever return? If so you should be urging everyone here to avoid AMD alltogether. In that case it would probably be because Intel is doing so well and then my INTC will be soaring. Not a bad hedge. Also the choice to buy stock and sell March 15 Calls after the stock had already surged $2 from the recent low was bad timing IMO. And for only 0.45/contract he had to sell a lot of CCs for commissions not to eat too much into his gains So don't do it. Who asked you to? I did it after the Hammer demo which is an entirely different situation compared to before. Market sentiment changes. And BTW, it cost me about $0.015 to sell those calls. That's not a big bite. EP

To: andreas_wonisch who wrote (73049)	3/4/2002 2:05:26 PM
From: Joe NYC	Read Replies (1) \| Respond to of 275872

Andreas, That's the problem when writing CC: You give up potential upside wins for downward protection. If there was a failsafe strategy to get downward protection without sacrificing potential upside everyone would be using it. I only write CC when I am willing to sell the stock at that price (e.g. after a stock surge when I am inclined to sell) or I only write for a portion of my holding CC. I sell CCs often, but I have changed my opinion about CCs so many times that I can't say I have a strategy any more. As far as selling CCs when you perceive that we have reached the top, lately, I have just sold AMD shares outright, with decent success. Right now, I don't have any CCs against my AMD shares. I have done a lot of call writing on MU lately. BTW, Elmer's strategy has many flaws IMO: In AMD's case the stock could go down a lot more ($8-10 seems to be the bottom of AMD's trading range) and he would lose up to 40% of his initial investment. And of course the stock could surge to $20 and Elmer would have to settle with only a tiny profit in the 5% range. Also the choice to buy stock and sell March 15 Calls after the stock had already surged $2 from the recent low was bad timing IMO. And for only 0.45/contract he had to sell a lot of CCs for commissions not to eat too much into his gains. I have to say I don't see anything wrong with Elmer's strategy / trade. I can see myself doing it exactly what he did. Right now, I am going to stay away from writing any CCs on AMD until the Jerry's presentation. At that point, I will see. Joe