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Strategies & Market Trends : Advanced Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (35)	7/12/1998 11:50:00 PM
From: ScamSeeker	Read Replies (1) \| Respond to of 355

Hi Herm, I was analyzing the other possibilities of writing CC against leaps and came up the the following. Please correct me if i'm wrong. If the stock doesn't reach 37.5 in 2.5 months, then the profit will be 112.50 or 7.7% for 2.5 months or about 37% anualized. If the stock decides to tank on you. Then your maximum protection assumming that you can continue to write CC for 1.12 points every 2.5 months would be approx $26 for the stock. Months til expiry = Jan00 - Jul98 = 17 months / 2.5 months = 7 writes 7 writes * 1.125 = 8 points and 31.50 - 8 points = $26. Do you think it would be advisable to also buy a Jan00 25 put to hedge your position? Also, can you write puts against leap puts? If so, that would generate additional income to pay for the hedge protection. Thanks, richard