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Technology Stocks : Check Point Software (CHKP) -- Ignore unavailable to you. Want to Upgrade?

To: PMylnar who wrote (1840)	3/21/1998 6:32:00 PM
From: ED PLOPA	Read Replies (2) \| Respond to of 7150

pmylnar: <Thinking about buying some calls for the breakout above $42/s. Any thoughts?> With all due respect, I prefer writing the calls. Friday, for instance I bought back my mar 40's at a profit and now rolled out to Jul 50's for which I got 4 points. Being a beancounter I've determine that I have already earned a 9.5% dividend by giving someone the right to buy my stock at 50. If stock goes above 50 by July, I've made another 8 points. Which is a little less than 20%. The rebuttal is what happens if stock breakouts out on highside. Answer: you write them only against a portion of your position. Like one half. So I now present to you that my 9.5% dividend really turns into 4.75% when spread it over my entire CHKPF position. That's still not bad if you're timing is impeccable and you can do that 3 to 4 times a year. Additionally, if stock does breakout, I still got half of position so I'm still elated. I also have an opportunity to roll my Jul 50's out. To be honest I've been more successful with this strategy on some stocks, like CHKPF, than with others. But you have to make the decision. I'm just giving you an alternative. Ed Plopa