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Technology Stocks : IFMX - Investment Discussion -- Ignore unavailable to you. Want to Upgrade?

To: Robert Graham who wrote (10641)	5/1/1998 3:47:00 PM
From: Robert Graham	Read Replies (1) \| Respond to of 14631

Yes, my short CALL position has been covered. I am ready to write another set of CALLs. Now, where is the "up" button?? By the way, I write CALLs as an investor who took on a large paper loss as a way to reduce my cost basis on this stock. This requires a very agressive CALL writing strategy which due to work related issues I have not followed through on as much as I really need to. I want my cost basis to work its way down and the price of the stock to work its way up with the goal of the two meeting somewhere in the middle. This gives me possibilities that I did not have before. First, I can sell much ealier and still break even. Every day in this stock is keeping mefrom profits elsewhere in the market. Second, the stock does not need to even make it to my original cost basis of 20 for me to break evem. Third, it may be in my best interest to sell before 20 is reached since there is allot of overhead supply waiting to see when that price is reached. I may be able to do this and still obtain a profit in this stock. I make all of this possible with a program of covered call writing. And I can do this even when the stock does not move at all. The problem with handling IFMX this was is that there appears to be allot of other covered CALL writers doing the same thing which has at times yielded a premium that does not make writing CALLs worthwhile. Aside from an occasional move made by the stock, the depressed nature of this stock is not helping either. So I have to manage CALL writing more in terms of the fluctuation in the price of the stock than using eroding time premium as my primary means in accomplishing this goal. I need volatility in the underlying stock in order to make this happen. So I have to make the relatively more risky plays on news driven price changes which is still manageable in the current situation with Informix. But this can change when more buyers become interested in this stock, particularly fund money. But then I hope to see the time premium increase on the options due to a change inimplied volitility where I can get back to using the eroding time premium of the option as a primary means to generating income from my covererd CALL writes. So essentially my current strategy involves playing the volitility of the underlying stock, and my future strategy will be playing the implied volitility of the option which inherently is to the CALL writer's advantage. Any comments welcome. Bob Graham