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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 (8833)	10/15/1998 12:30:00 AM
From: Douglas Webb	Respond to of 14162

Possible bull among the bears? Creative Labs (CREAF) is way, way, underpriced these days, at $9 11/16. They've released several hot new products this past quarter, and their official earnings announcement date is 10/27. The next quarter, through the Christmas season, is typically their best one. The icing on the cake is that the Singapore gov't is finally allowing Creative (and other Singapore companies) to buy back their own stock. Creaf has announced recently that they plan to buy back nearly $10 million worth of their stock this year, and they've got more than enough cash on hand to do it. That's certain to drive the price up, in combination with a good earnings report. The play here, I think, is medium term calls. I purchased 12 Jan 17.5 calls a few weeks ago for 3/8, and they're still available at that price. (They did pop up a bit to 1/2 last week.) I'm hoping to sell for 3/4 by the end of the year. Another good play is the Jan 15 for 5/8, which will probably sell for 1.25 - 1.5 in November. If you like naked puts, you could sell the Jan 10 for $1.75, or the Jan 12.5 for $3.125. If you're assigned, CREAF is a good longer-term buy at those prices. Doug.