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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: Seyda who wrote (8014)	7/31/1998 12:04:00 PM
From: Herm	Read Replies (2) \| Respond to of 14162

Hi Seyda, Yes, that was me! I jumped at those cheap puts since I have quite a bit of time (Oct.) to prove me wrong. You question relates to my choice of length of time vs. the strike price. If I can double my money in two months, that ok! I only need a clean 5/8s points to do that. A price drop from $19 to $15 in a short time span might do the trick. You notice that every stock has a different rate of turnover of 100% of the stock's outstanding float. That is, some stocks take three weeks to trade all of float and others 6 months time. Hence, the ability to grab up shares does impact the range of price movements and the amount of time it takes. High turnover stocks are much more active and forcefull in price fluctuations and that is why they are prime stocks during mergers, stock splits announcements, and during short squeezes. Check out Doug's web site for the float turnover formula. We need to update that. After a while you will develop an eye for that in the charting. Notice the time spans from month to month vs. how long the stock takes to cycle between upper and lower BB. Some will normally do it in one month and others in four months peak to peak. Also, the float turnover (TRO) does change from time to time. You really notice it after a stock splits and the float is dramatically increased. More shares means you need that much more trades and size of trades.