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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Harry Ehrlich who wrote (24417)	11/22/1997 3:12:00 PM
From: jach	Read Replies (1) \| Respond to of 61433

<<The premise was that you could buy 1 in the money call and sell 2 out of the money calls, for every 100 shares owned, and break even on the transaction price. You are correct in that the price structure often does not allow one to break even on the transaction. To continue the study, we assume that you bought 1000 ASND at 35 and it is now at 25. If you buy 1000 ASND now at 25, your new breakeven is 30, as you have "averaged down. Your "cost" is $25,000 plus commission. Perhaps "cost" is not the proper term, but your "cash outlay" is $25,000.>> My opnion is that with many possibilities of where the stock is going to go for the near-term (and where it's going to end up at expiration) do not lend well to this theory. One fairly good method is that if there is or are stocks that one wants to buy now then instead of buying to sell the equivalent of option contracts for the shares.