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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 (7739)	6/23/1998 9:42:00 PM
From: Tom K.	Read Replies (2) \| Respond to of 14162

<<I own 700 shares of BTGC and I have been waiting to average down and eventually CC the additional shares>> Herm, I think that is important for all of us to observe that when we have a stock that is heading toward the lower band, we really can't CC it easily (unless we go way out), and hence we have to wait for a turnabout which may never come. That waiting means dropping portfolio value and no CC premiums. I've learned that if my strategy is CCing, then I can't emphasize enough how important the underlying is. Then again, a strategy that attempts to play the volatility of the underlying with both buys and writes bouncing off the bands with RSI as a confirm can be quite profitable, but brings a whole set of other risks (and stomach churns) as well. I appreciate your sharing. Thanks. Tom

To: Herm who wrote (7739)	6/23/1998 10:10:00 PM
From: Mr.24K	Read Replies (2) \| Respond to of 14162

Herm, I am new to options. I have bought some call options a few months ago (done well on some and not so well on others). I still don't quite understand the concept of covered calls and puts. I happen to own 500 shrs of BTGC (bought it at a much higher price than current). I am down close to 50%. If we go on the premise that the stock may have reached the bottom and it may go up from 7 to 9 in the near future, should I sell 500 covered calls at 10 for Aug? and at the same time buy some puts for 10 Aug? What would happen under the following scenarios? if the price went to 10 or dropped to 5? Appreciate any info. Thanks in advance. RF