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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 (8037)	8/2/1998 5:45:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Good Question Seyda, Certainly, the SMOD Oct. 15s @ 1/2 would have a higher delta and would potentially be in the money much sooner than the 12 1/2 resulting in a bigger and faster pay off. It is a balancing question of risk/reward, comfort level, and cash flow reserves. I'm waiting for the BTGC BB and RSI bottoming in this cycle to average down. That will take the major portion of my idle $ free dollars in my portfolio. I can afford to lose $250 plus commissions. I'm not willing to fork over $500 plus at this time. Slow and steady wins the race! I'm getting more conservative as I learn from my mistakes.

To: Seyda who wrote (8037)	8/5/1998 5:59:00 PM
From: Herm	Read Replies (3) \| Respond to of 14162

Well, those cheap PUTs are starting to really build up some value! I have more than enough profit to cover all my cost to cover soon my 7 CCs for the BTGC 7 1/2 JAN. I still think BTGC may break $6.00 at the rate it is going. When you learn to read the RSI and BB indicators and discover how accurate it is, you will not hesitate to buy cheap PUTs, Calls and CC with more confidence. By the way, a reader emailed this week and asked "what happens when a stock does not conform to the charting using the BB and RSI". In other words, it never bounces or tags up or lower BBs with any thing that makes sense? My answer! Well, find another stock! Stocks that don't follow some kind of trading pattern are most likely being controlled by insiders or MMs because of small float and are not being subjected to natural trading behaviors or market forces. Practically every stock has a trading pattern. We are all creatures with trading habits. Some good, and some bad. MMs and funds have their trading habits. SMOD Has a long way to go down to $10 - $11 before a lower BB tag! Plenty of PUT action remaining folks! Low volume and no good news spells TIMBER! SMOD is just cycling downward towards lower BB as normal to form a double-bottom. date last chg. % high low volume Aug 05 16 1/8 -1 9/16 -8.83% 17 7/8 15 3/8 557,900 Aug 04 17 11/16 - 9/16 -3.08% 18 5/8 17 5/8 722,300 Aug 03 18 1/4 - 7/8 -4.58% 19 1/2 17 3/4 456,100 Jul 31 19 1/8 + 3/8 +2.00% 19 15/16 18 1/2 991,900 Jul 30 18 3/4 +1 1/4 +7.14% 18 15/16 17 15/16 1,045,400 TLAB TLAB is being picked off by the momentum daytraders! Notice the wide price swings between the high/low for each of the last two days. They smell the blood and are hungry for a profit kill! TIMBER! date last chg. % high low volume Aug 05 71 1/4 -2 3/16 -2.98% 74 1/4 67 7/8 6,748,600 Aug 04 73 7/16 -1 7/8 -2.49% 76 13/16 70 5/8 6,205,500 Aug 03 75 5/16 + 1/32 +0.04% 76 1/4 73 1/4 4,886,600 Jul 31 75 9/32 -4 3/4 -5.94% 78 3/8 74 3/4 6,719,800 Jul 30 80 1/32 - 29/32 -1.12% 80 1/2 75 3/4 9,729,900 Plenty of Pork on TLAB If you are long in TLAB you should be CCing DEEP in the money as far out as you can go! Three or more months in order to grab FAT premies. This is your downside parachute to protect your stock position. The premies can be used to buy cheap TLAB puts to make a kahuna as TLAB sinks, sinks, and sinks to the bottom of the cycle. It looks like $60 right now. TLAB is at $70 and trying to hold on! NASDAQ: (TLAB : $71) $12,885 million Market Cap at August 5, 1998 Trades at a 82% Premium PE Multiple of 38.4 X, vs. the 21.1 X average multiple at which the Communications Equipment SubIndustry is priced And finally, don't forget TLAB is taking on more debt with this completed merger. They will need to demonstrate they can reduce cost and turn a profit with that other company that was not making current expected earnings before the merger. Rarely, if ever, does a merger dust settle before two quarters. TLAB is top heavy at this point! Just my opinion of course! TLAB Golden Parachute? SOUDERS WILLIAM F D Disposed 5,000 $87.88 07/22/98 08/04/98 S SOUDERS WILLIAM F D Disposed 10,000 $87.75 07/22/98 08/04/98 S SOUDERS WILLIAM F D Disposed 5,000 $87.63 07/22/98 08/04/98 S SOUDERS WILLIAM F D Holdings 12,000 05/11/98