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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: Douglas Webb who wrote (8679)	9/24/1998 8:29:00 AM
From: Herm	Read Replies (2) \| Respond to of 14162

Feels good to be in the right boat! I just placed an order to short 600 BTGC @ $7 1/8. You know, the more I look at shorting against the box, the more I realize that it is the CHEAPEST insurance an investor can buy. Perhaps, that is why ALL THE FUNDS and MMs do it in the first place. 1. If the BTGC goes down, the shorted shares generate a profit while the stock drops in value. Net result = neutral. My cost? The commissions to buy and sell the shorted shares at a whopping $40.00. Advantage? I'm protected and I don't have to worry! Nice way to invest. 2. If BTGC goes up, the shorted shares drops in value while my stock gains in value. Net result = neutral. My cost? Again, The commissions to buy and sell the shorted shares at a whopping $40.00. Advantage? I don't suffer a lost one way or the other! 3. If I combined that above short against the box with a CCing then I have working capital for sideshows like cheap PUTs to make money. That is the working aspect of the strategy. If I'm wrong, well I give back the premies $ that I collected from my call buyer. Not that I'm willing to give up money. The point is it is not my original working capital and it still keep me in the ball game. As long as I'm right 8 out of 10 trades I can prosper.