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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Paul M. Rengier who wrote (6616)	1/29/1998 1:28:00 PM
From: tuck	Respond to of 14162

Paul: cboe.com And Others, A while ago someone mentioned the idea of writing calls on solid, but cheap and volatile companies. Several companies were mentioned by respondents, and one was Biotechnology General (BTGC). I researched and I bit on January 22nd. I bought 800 shares on margin at 12 1/8, then wrote 8 Feb 12.5s at 7/16s. One of the company's drugs now faces a delay in approval pending additional data. The stock is now in the mid 9s. I bought back the options at 3/16s. I am looking for a slight rebound to write the 10s. The time premium seems to be exactly 1/4 point per month. I am thinking of writing further out to reduce commissions, but I know that the most decay takes place near expiration. Any ideas on which path to take? I am also thinking of putting another 3k into play, which would allow purchase of another 600 shares, thus 1400 altogether. General comments on the strategy are appreciated. If there is interest, I will keep folks posted on how it's going. Also, for those interested, there is a thread on BTGC here on SI. But it only has four responses. It would be nice to get it cranking. Best of Luck to all, and many thanks for the fine ideas I've gleaned from this thread so far, Tuck