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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: The Perfect Hedge who wrote (570)	1/18/1998 5:20:00 PM
From: ----------	Read Replies (1) \| Respond to of 2241

Sure, there are many many variations. As long as you own the call that has the longest time, you are covered. E.g. ... you own the July 50 xyz calls. You could sell the April 50 xyz calls. Doug

To: The Perfect Hedge who wrote (570)	1/21/1998 8:58:00 PM
From: William G. Murray	Read Replies (1) \| Respond to of 2241

Glen, Buying a call with some time left on it and then selling a near term call is a valid strategy called a "calendar spread". A popular version is to buy LEAPS (a very long term option) and then sell near term calls hopefully many times. The benefit of the LEAPS is that they often cost less than half of the stock price (less capital invested compared to buying on margin), no risk of a margin call, and no debit to your account for margin interest. An example (not a recommendation) would be to buy a Pairgain LEAP Jan 2000 call with a $20 strike (symbol = LGC AF)at the current ask ($4.625) and sell the February 20 call (symbol = PQG BD) at the bid ($1.0625). The plan is to continue selling covered calls against you LEAP as often as profitable (possibly rolling up if the stock price increases) until the LEAP is ready to expire or you decide to close the position. Best case scenario would be PAIR to continue to have significant volatility (increases premium) but stay near $20 for the next two years. WOW Sell the 20 strike calls for a $1 every month for the next 2 years. At least we have our dreams. Hope this helps. WGM