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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: Mike Fredericks who wrote (7838)	7/7/1998 2:46:00 AM
From: Seyda	Read Replies (1) \| Respond to of 14162

I was pondering about your option strategy for CPQ. Is it correct to say that Price $/contract 23 -300 24 -300 25 -300 26 -200 27 -100 28 0 29 100 30 200 31 200 .. 200 By the way, Jan 99 options for Compaq are displayed in two different symbols (CPQ, VKZ). What is the difference between the two? Thanks in advance. Seyda

To: Mike Fredericks who wrote (7838)	7/7/1998 4:08:00 PM
From: Mike Fredericks	Read Replies (1) \| Respond to of 14162

Just an added note that many of you may know already but I learned this the hard way today and I figure I'd save the rest of you the heartache. Moral of the story: You can be approved for option trading and covered call writing at your brokerage and NOT be approved for spreads. I didn't think there was anything different between writing a covered call on a long option and writing one on a stock. Had the purchasing power in my account to go long a call, went long the call (via internet trading) got a great fill (unusual), then the stock jumped a bit and it was perfect time to write the short call at the higher strike and the order gets rejected because I'm not approved for writing spreads. So now I'm long some calls but my risk ratio is off and I'm a bit bummed. I mean, I think the stock will go up anyway, so I don't mind being long the calls, but that wasn't my intent. FWIW brokerage is Discover Direct (formerly Lombard) and they said they'd send me a spread-trading agreement that I would have to fill out. Just something to keep in mind. Yes, I should have done my homework first, but please nobody else make the same mistake I did. -Mike