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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: Amigo Mike who wrote (451)	2/5/1998 9:55:00 PM
From: Sergio H	Read Replies (1) \| Respond to of 29382

Mike, just got in and catching up with the market. I'll update the Amigo porfolio for the evening. Lots of good news. Could you take a look at Pixar options. Insiders have been scooping up shares and they reported well ahead of expectations after the bell. I'm in tomorrow morning. Sergio

To: Amigo Mike who wrote (451)	2/5/1998 10:18:00 PM
From: Ken W	Read Replies (1) \| Respond to of 29382

Mike, If I may be so bold as to add something to your post to Joe. Joe mentioned "just selling the call for the premium." This is correct Joe. You can also "write covered calls". This means that you already own the stock. By selling the calls at a strike price you are allowing someone to buy your stock at that strike price. You collect the premium outright in cash. If the underlying stock goes up the call price follows and often times increases at a faster rate than the stock. If you do not get "called out" you still own the stock and keep the premium. 85 to 90% of calls expire worthless. I know people that have never been called out on a stock. Basically, calls are traded just like a stock, warrants or LEAPS. Most folks never intend on owning the actual stock. They are riding the price of the stock for a much smaller capital outlay. Calls are risky in that they have a short life. Mike shall we go into "in the money" etc.? Ken W

To: Amigo Mike who wrote (451)	2/5/1998 10:32:00 PM
From: Sal D	Read Replies (1) \| Respond to of 29382

Mike , so getting back to my example I could purchase a (CDTGE) July 25 call for (ask 6 1/2) $650.00 Or a (CDTGG) July 35 call for (ask 1 3/8) $137.50 Other questions what do the X, Y, and Z stand for (example CDTCX)? Do brokers count each call purchase as a trade (example you by 3 calls for a total of options on 300 shares do you pay three separate commissions even though you buy them at the same time? Will they ever sell between the bid and the ask? Thanks Joe