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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Keith Howells who wrote (75813)	10/30/1998 4:10:00 PM
From: TigerPaw	Read Replies (1) \| Respond to of 176387

when did you sell the calls and for how long? Actually I did some experiments. I had decided to divesify a bit and so I could allow the stocks to get called. With 3 month options even when I got $20 for each option I would have been better off waiting the three months and then selling. It tried out of the money and in the money options. Basicly it doesn't pay to sell calls on a stock that is rising in price. It's really bad if you don't want to sell the stock at all (because you then have to pay tax). Option prices can change suddenly. For example I sold some Dell 70 calls three months ago. Dell was about the same price it is today. I could have covered those calls last week for less than a dollar, I didn't but now it's over two dollars to cover. At any rate, the only area where I have found covered calls successfull are to buy a stock that I wouldn't mind buying anyway. For example RMBS. It is selling for less than $65 so you buy the stock and sell a Nov $65 call option for $4 a share. Either it goes down and you keep the $4 or it rises, maybe a little or maybe a lot but you still made $4 on a 65$ purchase for a bit more than 6% in a month. Just don't kick yourself if it goes up to $70 or more. Remember the plan was for 6% and be happy when you get it. If the stock is called, buy it back (Or in my case I vary between RMBS CSCO DELL and a few more which have good option premiums, It just depends on which one seems like the best buy at that time). I don't mix in other types of options because it is an IRA account and covered calls are the only option allowed. If the market tanks it takes too long to get back your call and then sell the stock so I just ride out the bad times (That's why I only deal with stocks that will recover after a market tank). TP