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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Steve 667 who wrote (25922)	5/24/2004 11:01:17 AM
From: Art Bechhoefer	Respond to of 60323

Steve, we agree about the limitations on selling covered calls. That's why the TIMING of a sale is important. When SNDK shares moved above $30 (adjusted for the recent split), the stock was definitely getting a bit pricey, at least in relation to the mixed performance in the tech/semiconductor sector. That was the time for investors holding SNDK for long term appreciation to sell covered calls with expiration dates at least three months in advance. That strategy was indeed conservative because it lowered the cost of owning shares that pay no dividend and are subject to market whims. Selling covered calls at present prices for SNDK would be stupid. I hope we and others understand that whatever one does with options, it has to be done when the shares are priced advantageously. Maybe you simply object to my use of the term "lock in profits." The strategy locks in profits to the extent that it reduces the cost of owning shares that themselves produce nothing in the way of dividends, where capital gains are the only way investors can obtain a reasonable return on investment. Art