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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (7348)	4/23/1998 11:55:00 PM
From: tranzz	Respond to of 14162

Hi Herm, That was a very nice well written response to my plea. You really took your time and effort in posting that. You are a kind person and I really appreciated that. Being a newbie in the business, I know that I should not have stepped in an area that is kindda out of my level. Blunders like this makes you learn even quicker. I'll take advise #4 and hopefully the damage is minimal. Thank you.

To: Herm who wrote (7348)	4/24/1998 2:29:00 AM
From: B4TheBell	Read Replies (1) \| Respond to of 14162

Herm, et al... A VVUS Case Study: There have not been too many days in recent months that I have been pleased to be long VVUS (since mid-August 97). Watching it drop from my entry point in the high 30's to current levels has been one of the most agonizing experiences of my trading career. The only thing that kept me from selling at a huge loss was the opportunity to sell covered calls against my position using the strategies I've learned from folks on this thread. The premiums have lowered my cost basis significantly, effectively providing me with income to buy additional shares at increasingly :-0 lower prices... When it fell below 10, I decided to punish myself for breaking my own trading rules and not getting out at my usual 10% loss limit. My "punishment" was to buy 50 shares a day for every day that VVUS stayed below 10. Needless to say, this accelerated my basis to a more reasonable level although at great risk and the ridicule of my co-workers. Please note, I am NOT recommending this approach to anyone! My tolerance threshold was broken long ago and this was a desperate act on my part. The daily onslaught of Viagra news has addled my judgement... Today, when I fired up my computer for my lunch-hour trading session, I just about croaked. I did a little happy dance, as I did not have any calls written against VVUS. Then I got down to business... Sold (20) May 12.5's at 1 1/4 and (5) at 1 1/8. This brought my total cost basis to just under 9 per share. I have an additional 1700 shares that I haven't written against and am waiting for tomorrow's action to give me some guidance. It wasn't until after the close of market today that I had the chance to read the news and see the 20+ price target projected :-0 !! Herm, I want to thank you for all your time and effort put toward maintaining this thread. I have learned greatly from the postings and links to other sites. I've steered many newcomers to the CC game in this direction based on the quality of information found here. Even my Mom is writing covered calls in her portfolio now; she picks the stock and I dippity-do the options for her. She is more than pleased with the 67% annualized return she is getting on this strategy. She would thank you personally except the last time she used a computer it was something called a "Wang" :-) Please keep up the great job you are doing, and here's to many more opportunities in the CC game!! Lastly... Doug, your "stuff" is on it's way. Thanks for your fantastic efforts on your site. I can't wait to try my hand at spreads... B4 whew! not bad for a lurker...