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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: SFgymrat who wrote (41548)	3/30/1998 1:56:00 PM
From: ibrandybuck	Read Replies (1) \| Respond to of 61433

<"sold 4 April 35 calls (QQADG)at 1 5/8"> Consider rolling out the April 35s; e.g., closing out the April 35s today and selling the May 35s should net you close to 3/4. Alternatively consider selling some put contracts. Both approaches return you to a standard long position if the stock price drops below the exercise price at option expiration time. Some people are able to generate fairly consistent returns of 20+% using these approaches, until/unless the stock price rise makes the option is so far out of the money that the time premium becomes neglibable. Of course your upside potential is limited to the premium amounts and your downside risk is analogous to a long position. But closing a covered call position by buying it back when the price rises suggests that you are really speculating via call writing rather than using the call as an vehicle to set an exit price/strategy (with a premium). The risk/reward characteristics in that case begin to resemble those of writing naked calls. IMHO, people who are truly long on a stock, who are not considering selling, really should not be selling covered calls, especially if they would be loathe to write naked calls.