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.

Strategies & Market Trends : Roger's 1997 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: space cadet who wrote (7755)	12/3/1997 5:21:00 PM
From: Pancho Villa	Respond to of 9285

space>>Incidentally, while buying options is definitely risky, do you ever sell covered calls on your positions (or covered puts on your shorts)? I think actually that this is the best of both worlds and plan on doing this a lot more, once I get through this risky period.<< I don't. but this is one of those cases in which options may be justified. suppose you were holding WLA, you got in a while ago at around 50 and the stock is trading at $150. You are a bit nervous you think the stock is now fully valued you want to sell it but hate to give uncle sam the tax$$$. Well one thing you can do is write a call on the money [i.e., at around the current price] if the price of the stock goes up they take the stock away from you but you pocket the price of the option, it the price goes down you have made some money and still hold the stock. This strategy, however, limits your upside return potential. Just holding the naked stock is riskier but also generates a greater return long term. And again, any of this stuff you use only occasionally. Pancho