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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: Joe Waynick who wrote (7657)	6/16/1998 8:45:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Hi Joe, What you have is close to "synthetic stock position" as illustrated by McMillan. You would be better off buying the PUTs and buyng the calls rather than shorting the stock. More leverage and less margin requirements. If you monitor and react fast enough, yes, you would have the premie at risk for the most part plus commissions.

To: Joe Waynick who wrote (7657)	6/16/1998 10:18:00 PM
From: Tom K.	Read Replies (1) \| Respond to of 14162

<<The way I see it, my total risk is the call premimum. If the stk is anywhere below $9 by expiration day, I make a profit.>> Joe, why not just buy a $10 PUT for the $1 premium and don't bother with the stock. Using your scenario... 1. stock is flat... lose premium (same result) 2. stock goes up to $15... lose premium (same result) 3. stock goes down to $5, PUT goes up to $5 and your $1 investment has gone 5 fold, i.e. 500% in 60 days. A cheap (and simple) alternative to consider. Tom