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

To: Mike Gordon who wrote (23881)	4/3/1998 8:44:00 PM
From: Spots	Read Replies (1) \| Respond to of 97611

>>Arguments can be made that CPQ in fact will be higher then $30 in May. And I think there is a pretty good chance it will, however, I'd rather take my $25K today. JMHO Mike, it isn't just your humble opinion, it's YOHEM, that is, Your Own Hard-Earned Money. You still get to do with it what you want, regardless of naysayers. Take your profits and be proud of your opinion if that's what you decide to do. Now THAT'S IMHO, because it's not my money. Regards, Spots

To: Mike Gordon who wrote (23881)	4/3/1998 11:25:00 PM
From: robbie	Read Replies (1) \| Respond to of 97611

Mike and all: If you want to make some quick money selling calls, why not take some of those proceeds and buy an upstrike call, at a higher strike price than the ones you sold and a couple months into the future? Then you can have the best of both worlds. Personally, I only like to sell calls after the stock has had a nice run, not when it's near its lows. Robbie

To: Mike Gordon who wrote (23881)	4/4/1998 9:53:00 AM
From: Andreas	Read Replies (3) \| Respond to of 97611

Right on! I believe a lot of investors forget that a bird in the hand is worth two in the bush. And don't forget when one does the ROR on a covered call scenario the result is often in excess of 40% annually. At that rate Warren Buffet looks like a piker. In fact, I can give a perfect example where I blew it, as others would say. I bought Coke at 72 and wrote the covered call at $75..00. Stock has gone to $80.00 in just three weeks. Clearly I would have been better off just owning the stock. However. When I did the math I concluded, regardless of what Coke may or may not do, I cannot argue with a return of $4.00 per share in thirty days on $72.00. That's a 5.5% gain in one month!! Annualized that is about 60% net of commissions. I went for the bird in the hand. But remember this - one is not likely to repeat a situation where you buy the stock, sell the call and then the stock goes up in excess of 10% in three weeks. So yes, cpq could do this, it could do that by May. Who knows? Buying cpq at $26 and selling the May call for $1.00 with a strike price of $27.50 gives one a $2.50 return in about six weeks. I'll take the 6% in thirty days anytime.