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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: Vol who wrote (7866)	7/11/1998 9:34:00 AM
From: Ken Hawn	Read Replies (1) \| Respond to of 14162

Herm, I did a paper trade a few days ago on EGGS. I was writing a July15 call and the stock was 15 1/4. The premium was 1 3/8. Not bad for less than two weeks left to expiration. I was concerned about the stock falling again to it's $9 level so I bought a July 12.5 put for protection. Well, the stock rose to $21 at the end of the week, so I have to assume that I was called out. I would have lost a 1/4 point on the stock but gained 1 3/8 on the premium ( 137.50 - $25.= 112.50). Buying the put caused another loss of profit (112.50 - $38= 74.50). Is there a rule of thumb on when to buy or not buy a put? In this case it was just a waste of money.