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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 (8816)	10/13/1998 10:07:00 AM
From: Douglas Webb	Read Replies (1) \| Respond to of 14162

I noticed the calculator yesterday. Looking good! Do you have a source for the volatility value on the web site? Thanks. I kind-of have a source; you can go to the option page, look at the call and put volatilities for options near the strike/expiration you're interested in, and estimate from that. For example, yesterday I was considering buying calls for SWW. The Nov calls were a bit more expensive than the Jan calls, but should be more responsive for the time period I'm looking at. The Jan 5 and Jan 7.5 were both going for 1/4, which was odd... I averaged the call and put volitilities for these strikes: Nov 5, Jan 5, and Jan 7.5. I went to the calculator, put in the price range of $2 - $7, and each of my three strike/volatility pairs. For each I looked at possible future prices (near the bottom) for various stock prices, and checked those against the cost of buying the calls. I wound up buying the Jan 5 calls, since they seemed to have the most potential profit for all the variations. (Also, the Nov calls had no open interest, so I wouldn't have bought them anyway. But it's good to do the analysis.) By the way, I emailed you a new file. Could you place this file on your web? I put it up on my spreadsheets page. It sounds cool! webbindustries.com Doug. PS: I'm looking forward to seeing the W.I.N.S. Primer!