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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: Playin my Cards who wrote (8231)	8/15/1998 3:17:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Welcome to our forum! You own 300 shares of CUBE at a net cost basis (nut) of $17 1/16 per share. You are considering writing 3 CCs for the Aug. 17 1/2s for a quick gain. The first thing I do is plot the chart to take at look at the CUBE price trend and current cycle. I also take a look at the P/E. Earnings have been increasing and the stock is at a discount. It will most likely hit that $18+ price from here before cycling back down until the next earnings report due out October 15, 1998. That is a long way! So, at least one more downward cycle before a jump is most likely. Also, the downward price decreases over the past six months has resulted in a triangle pattern which gets smaller and smaller and eventually gaps up! October could be a gapper for CUBE! Short interest for CUBE has been increasing and will most likely slow CUBE down when it hits $18 and pullsback. When that CUBE earning report hits it may be a trigger for a short squeeze. bigcharts.com NASDAQ: (CUBE : $17 1/4) $634 million Market Cap at August 14, 1998 Trades at a 39% Discount PE Multiple of 15.4 X, vs. the 25.4 X average multiple at which the Computer Peripherals SubIndustry is priced Month Shares Short Avg Daily Volume Ratio* Remark 07/98 3,953,197 398,554 9.92 days 06/98 4,677,120 594,909 7.86 05/98 5,017,706 984,677 5.10 04/98 5,175,714 499,038 10.37 03/98 5,425,507 455,593 11.91 02/98 6,051,445 893,307 6.77 Sure! I go along with your CUBE quick hit! Yes, if the call is exercised you will have a commission for the stock to be sold and the option exercised. That is why I advocate only CCing with more than 3 contracts per round. Thanks for your question!