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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: Herm who wrote (8145)	8/9/1998 7:54:00 AM
From: Senator949	Read Replies (1) \| Respond to of 14162

Thanks Herm. That was my gut feel but I don't have the experience to be real confident with it. What do you call DEEP? I sold 22 Aug 30 CC's for 5 3/8 on Fri and got real worried when it kept climbing up beyond that. It started dropping mid-day and closed with a Bid of 4 1/2 and an Ask of 4 3/4. After the fact I was thinking I should have sold Jan or Oct instead but then I'd have longer to watch and worry. Robin

To: Herm who wrote (8145)	8/9/1998 9:49:00 AM
From: Senator949	Read Replies (1) \| Respond to of 14162

Herm, Further to my previous post. Initially the reason I was selling what I thought was deep in the money is because I was hoping I would get called out. My nut on my CPQ shares is 28.4 and I've only been holding since May so 35 3/8 would have been a very good return. The reason I was hoping to get called is because the "call of the north" is getting really strong. With the Canadian dollar at all time lows there must be some really good buys. One I was looking at is CIBC, Canada's largest bank. It's 5 year chart from YAHOO (CM.TO) is as straight as an arrow with the exception of a few notches caused by earnings warnings. Well on Friday before the bell I guess, because it opened at the day low (-9 from the previous close), CIBC issued a profit warning and lost 15.6% of it's value on the day. It opened at 35.05 rose to 40.10 within the first 20 minutes and then started drifting lower with a couple of big drops until it hit about 36 and then started climbing again. It made it back up to about 38 by 3pm and then drifted down again to close at 37.15. I think it's chart looks pretty good for W.I.N CCing if you use a 10 BB and 8 RSI. You can look at it with a symbol of CM and CDN on askresearch. I guess my question is, how long will the earnings warning effect the price? Would Monday be a good day to take up a position? I don't really want to lose my CPQ position because I think it is a long term winner but I really do think there is big short term money to be made because of dollar exchange rates. Also I really don't want to use my margin unless absolutely necessary, therefore my stategy is: 1. Let my CPQ CC's get called out if they really want them. 2. Buy JAN 30 CM (CIBC) calls at ask on Monday opening. At the close on Friday the Bid was 8.15 and Ask was 8.40. 3. To maintain my CPQ position buy Jan 30 calls when CPQ hits the lower BB again. 4. If the CPQ does get called out, call out the CM shares. Is this a sound stategy? Any suggestions? Thanks, Robin

To: Herm who wrote (8145)	8/9/1998 4:31:00 PM
From: Dr. No	Read Replies (1) \| Respond to of 14162

Hello Herm: I do not own CPQ. From reading your analysis, what do you think of buying September 30 PUTs for .5 bid and .625 ask. From the BB chart it looks like the price goes from peak to bottom within a month. I would like to do this on Monday. Also, where do you get the short interest information for NYSE stocks? Thanks Mo