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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: Joe Waynick who wrote (8572)	9/15/1998 7:27:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

Hi Joe, From the W.I.N.S. point of view you should be using your <W>ithdrawing and <S>ideshow arsenal fast. The price is dropping off a new 52-week high of $39 1/4. And, without beating you over the head you know that the upper BB was tagged and RSI was screaming high at approx. 78 for this stock. This is a easy setup for another bear trap! So, you needed to sell at the money CCs out a far as you can go to grab as much CC premie as you can manage. Had I been in your shoes I would have sold the LDG DEC 30s @ 8 ($12,000)with the intention to cover before December. According to the chart, the first bottom support would kick in around $34 and then $31. As my sideshow, I would have loaded up with the 50 LDG OCT 30 PUTs ($7,500) with the intentions to close to cover at the $33-34 first bounce. If LDG continues to drop I would repeat the PUTs sideshow at a lower strike. The long CCs would stay in place until LDG reached $31 and then cover the CCs @ 3 1/2 ($5,250) for a net profit of around $6,750 off the CCs. NYSE: (LDG : $37) $1,475 million Market Cap at September 15, 1998 Ranks 436th in the Fortune 500 on Revenue & 690th on Profit. Employs 16,000. Trades at a 7% Discount PE Multiple of 22.6 X, vs. the 24.3 X average multiple at which the Discount & Variety Stores SubIndustry is priced. LDG OPTION PRICES askresearch.com LDG TECHNICAL CHART bigcharts.com SUMMARY Luke Skywalker could not fight Darth Vader because he lacked faith in the power! You must allow the "force to be with you" Joe. You have alot riding on this move. You need to beef up your downside hedge with more downside protection to turn this into a profitable outcome! You can do that!