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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Wood who wrote (17484)	5/13/1998 8:25:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 25960

Steve, in a bear market you change the strategy to deeper in the money calls, of course it does not protect you against deep declines, but it eases the pain if you are planning to keep the stock through the bear phase. Of course,if I knew for sure that we would be in a bear market or even a "bear market for a segment of the market, I would simply avoid the market or the segment. But then I would not have the benefit of a turn around either. Zeev

To: Steve Wood who wrote (17484)	5/14/1998 10:11:00 AM
From: Scott Violette	Respond to of 25960

Steve, Your example clearly points out the leverage ascept of selling puts that most people forget versus covered calls. Also, IMO, Raging Bull market is not good for covered calls. Although rolling options is a good strategy, transactional costs can not be forgotten for the retail investor (Curly has a point). Selling options can incur half the transactional costs of buying options (Selling Options=pay commision, Options expire=no commision but Buy Options=pay commision, buy stock or get out of options=pay commision) Covered calls are best in a stagnant market to slightly down or up. Timing aspect comes into play and covered calls are best sold after stock has peaked out (short term). Deviation is usually high; fattening up the options.