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

To: Sam who wrote (669)	2/7/1998 12:17:00 PM
From: ----------	Respond to of 2241

Sam: You pretty well have it. There are two "catches" if you will. 1) Once you sell a call on a stock you cannot sell the stock until the call expires or you buy it back. Just for instance, Bombadier gets attacked by a squadron of analysts flying FW-190's.<g> You have to buy the call back IF you would want to sell your stock. 2) While it is acceptable at the time, I've personally found I feel bad when I sell a $50.00 call & the stock takes off like a cruise missile & goes to $75.00 . So, in exchange for the premium you receive, you have obligated yourself to the above. IMO, before anyone takes an option position, they should ask or be told the absolute WORST thing that can happen to them. If you can live with that, then consider doing it. Doug

To: Sam who wrote (669)	2/8/1998 2:00:00 PM
From: margin_man	Read Replies (1) \| Respond to of 2241

Hi Sam, Sorry for the late response. Doug already answered your questions very much. One thing you might want to consider is to sell the stock and cash in your profit instead of selling covered calls. It looks like the bad news over Mexico deal may bring the stock down. The premium for selling the c/calls may not protect your profit if the stock is heading lower. If you like this stock, why not sell it now and wait for it to build its base then jump back in. That's my 2 cents in US currency. :-) Good luck, Patriot