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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: margin_man who wrote (20553)	2/11/1998 2:41:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 36349

<< Even if you have gained 6 1/2 pts in margin buying, it doesn't mean you will have an option buying power of 6 1/2. >> Once the account equity rises above 50%, option buying power will rise dollar for dollar with share price. The example I gave was optimal. You might have to settle for rolling up only to 17.5 as the next stage. Or, you might have to roll out to a more distant expiration date. But, the principle remains valid: As share price rises and expiration nears, time premium will shrink, and incremental profits can continue to be made by buying back the calls with shrunken time premiums and selling calls with still swollen ones.