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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: TobaccoMan who wrote (9247)	12/8/1998 3:40:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

WOW Tabacco Man, You have a heck of a nice profit in WMT! My first response would be to cash out. Otherwise, protect your downside. WMT has a 13.67% growth rate and a P/E that is a bit overpriced at 38.6 P/E. You could grab a hugh premie by selling the 75 JAN01 LEAPs @13 5/8s. That's $2,700 or 13 point downside protection. Or, if you believe WMT will drop from current levels the 65 JAN01 LEAPs @ 23 3/8s will give you $4,600 and 23 points of downside protection. Of course, what you would do is cover at a much lower point when WMT is about to reverse. NYSE: (WMT : $75) $167,320 million Market Cap at December 8, 1998 Ranks 4th in the Fortune 500 on Revenue & 14th on Profit. Employs 675,000. Trades at a 44% Premium PE Multiple of 38.6 X, vs. the 26.7 X average multiple at which the Department Stores SubIndustry is priced askresearch.com

To: TobaccoMan who wrote (9247)	12/8/1998 5:17:00 PM
From: k.ramesh	Read Replies (1) \| Respond to of 14162

Count yourself blessed, and hold on forever. I too have considered calls on WMT, but if you get called wouldn't you have to pay taxes on those huge gains. I think many of the gorrilla stocks are so high simply because the long termers cannot sell it because of huge tax bite and it creates a scarcity. There was some one else who sold calls on INTC and it ran away from him, I wrote calls on EMC and bought em back at a loss, which eventually turned out OK because of its continued run up. Do not stand infront of these freight trains when they get going. Especially the quality ones like WMT. Their IT infrastructure itself would probably keep them ahead of their peers for a while. Now trash like MU is another story. I wrote July 55's for 10 today, betting that it will crash back in the next six months when Kurlak or someone else thinks its time. But what do I know. Ramesh.