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

To: Robert Graham who wrote (11080)	6/18/1998 4:31:00 PM
From: Marq Spencer	Read Replies (3) \| Respond to of 14631

Bob, Thanks for your response. You see the volatility play with the covered calls, giving you about a dollar on the swing (minus commissions). I see a combination of volatility and time premium play. Let me explain. Currently the time premium for Aug at-the-money calls seems to be close to a dollar (stock at 7 15/32, Aug 7 1/2 at 15/16). Neither of us sees anything in this stock that will make it explode on the upside (otherwise we wouldn't be looking to write covered calls). So, as the stock gets close to 8, I should be able to get $1 1/4 to 1 3/8 for the Aug 7.5s. That, by the way, would be above my basis (which is currently just around 8). If it then retreats to 7 due to volatility, I can cover my calls, otherwise the premium will erode. what do you think? - Brian.