Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Lin who wrote (7277)	11/4/1997 10:39:00 AM
From: bob yahnke	Read Replies (1) \| Respond to of 14577

Bill, alot shorts out there will hedge with buying options. I think that's why we're seeing high premiums.

To: Bill Lin who wrote (7277)	11/4/1997 10:50:00 AM
From: SidStock	Read Replies (2) \| Respond to of 14577

Bill- If you sell the april 10 calls, you will have to wait quite a while to buy them back at a profit. Being this far out, they will not deteriorate in price very fast. And with the bid/ask spread you will have to wait for the ask to drop below a buck before you can make any money. You will also be stuck holding the stock to cover it, and cannot sell the stock if fundamentals get any worse. Writing calls is usually better when the stock has done a recent run-up and you expect it to pull back. Then you can write in the money calls for a short duration out. These will deteriorate directly with the stock price while they are in the money. I would suggest you go check out the thread: How To Write Covered Calls - An Ongoing Real Case Study! For some insight from those who do this a lot. Good luck, Sid