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Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Tom Halkar who wrote (8828)	10/23/1998 8:35:00 PM
From: jebj	Respond to of 12039

>I would not want to be in one of those stocks that the MF decided to dump with a covered call.< Tom, not sure I understand but if I own the stock and sell a call on it - covered call - I don't see how the MF dumping the stock could affect me. Certainly the call is not going to be hit if the stock falls and I can dump the stock - and become uncovered - without worring about it, could I not? <<Also, why not run a covered straddle if you are going to cover?>> Here an opportunity to teach me something. Give me an example of how this works and the benefits.< Boy, this is going to be the pot teaching the kettle, but here goes - In a straddle, you sell both a call and a put on the same stock at the same time period - Dec. 50. If the stock goes up, the call gets hit but the put does not. You can buy it back if you like and you have the premimums on both the call and put. If the stock goes down, the put gets hit but the call does not. You can purchase stock as it goes down to offset some of the put price if you like and you still have the premimums on the call and put. If the stock does not move, you have the premimums on the call and the put. Would not make any difference if it were covered or not. I think! :) jb

To: Tom Halkar who wrote (8828)	10/23/1998 9:56:00 PM
From: jebj	Read Replies (2) \| Respond to of 12039

Tom - Don't know if you have done so but there is a great tutorial you can download from cboe.com A little hard to find as you have to register before you can get to the area it is in - After registering, go to "help/resources" and then to "free downloads". There you will find the "tookbox" - has everything you ever wanted to know about options as well as being able to run comparisons of different options and trades. Good stuff which I am just in the middle of at present. Feel like I am back in school - and too old for this! :) jb