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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: Douglas Webb who wrote (8917)	11/4/1998 12:18:00 PM
From: yaumi	Respond to of 14162

Doug --On SBUX " Maybe I'll sell the Jan 55 and take in $137?? You could, but why? The $137 is nothing, compared to the $11k+ you've got in the position, and if SBUX does recover past $55, you'd be forced to sell at a slight loss. With the spread, you'd be in almost the same position as you are now if SBUX doesn't recover, but much better off if it does" Thanks for your reply. My first thought as to why, was that SBUX maybe wouldn't reach 55 by January. So why not pick up a bit of $ while waiting. But the more I thought about it, I like your reasoning decided to go ahead with the recovery spread. Well, part way. SBUX way up the day after your reply, then down a bit yesterday so I bought 2 JAN55 @ 1. Then I didn't sell the JAN65 for 1/4 (kind of on your reasoning, what's a $100) figuring if the spread works at all, JAN65 would be higher later, or maybe if the Jan55 go up I could just sell them. I also found your options page very impressive. I decided on selling ASPT DEC15 @ 2 7/16. Your page shows 17% on net cost and 25% call gain. Thanks Yaumi