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

To: Elmer who wrote (74961)	3/19/2002 1:58:22 PM
From: Joe NYC	Read Replies (1) \| Respond to of 275872

Elmer, How do you know what the price of AMD will be on April 19th? It does not matter. Suppose in the last example, you sold for .80 and rolled for .40 (a ballpark figure, I don't remember your figures exactly). If you held to expiration, you would have realized the full .80 in a single month. Now the action for the next month would depend on closing price. If it is below $15 (March expires worthless), you can sell April 15 cc for any price, and still be ahead (since you realized your 2 month profit in one month). If it looks like it is going to close above 15, you either let the shares be assigned and you can re-establish your position again next week If you want to continue to hold the same shares for tax reasons, you can roll just prior to expiration when the premium is hear zero (over intrinsic value). Maybe I am not looking at all possibilities. Can you show me an example where you do better by rolling this early? Joe