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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Sundar Rajan who wrote (55783)	10/11/1998 8:39:00 PM
From: Gary Korn	Respond to of 61433

Wondering whether I should write nov 50 calls if asnd runs up some more? Sundar, I replied to you by PM but had another thought and figured I might as well post here. My bottom line is that if you like a stock, keep it. If not, sell it. If you write calls, you are giving up upside (when stocks move, they can move fast, right past the strike price) or you could be locking in downside (if the stock drops, you'll keep holding, and the call premium won't make up enough of the difference). More often than not, when I write calls I end up regretting it. A lot of folks here are probably more savvy about call writing, but it just hasn't worked for me. Also, a covered call is a synthetic naked put. You could use less equity by selling your longs, starting from scratch, and writing puts on ASND (I do that monthly, taking conservative strike prices and waiting several weeks into the month, closer to expiration). Still, a naked put is a bullish position and it could bite you in the butt should the stock tank. Best, Gary Korn