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Strategies & Market Trends : Anyone following Capstead (CMO)?? -- Ignore unavailable to you. Want to Upgrade?

To: Dawgfool who wrote (190)	1/5/1999 8:49:00 PM
From: James F. Hopkins	Read Replies (2) \| Respond to of 216

Dawg; Since I posted that last post, sure enough something must be going on, they sold more calls, this time for 1-3/16..so I missed an 1/8th on them. That's unusual amount of calls for CMO, and low and behold she went right on up late today. Almost makes me feel smart grabbing them at 4-1/4, but I had no idea she was going to pop up another 1/2. In a way the early price and volume on the calls may should have told me that, as why would they pay that much premium ? But all I wanted to look at was the 40% , and having reduced risk to boot. ---------- I started off buying this thing months ago at $7..and bought at 6, 4 and 2-15/16 until I almost thought I was nuts. She has been a tough one..I sold the 2-15/16 batch at 4 3/16 & got my tax break, as I sold them against the first ones, being I use FIFO on all of my trades, ( anything else would be a nightmare for me to keep up with ). Today I had some reservations about buying back in at 4-1/4 but that premium looked good enough to shoot at, and if she is to drop back it gives me them at 3-3/16 ; I could be wrong but I just don't see her going back down there. It's been a pain in the rear, but they haven't shaken me out. <G> As it is now I'm sort of in limbo with her, being I sold the calls my over all profit is limited and not a lot if she goes to 5 or above, unless I buy more if she dips again. So it's odd that I now find myself kinda hoping she will dip. At any rate, if she takes out 5 I'll see that as a break out, and if they keep paying about 40% on the option premiums, ( that's till June & amounts to 80% a year,) so if that keeps up I'll likely jump on some more of her. ---------- Late today at 4-3/4 I could have got 1-3/16th for 5ves but that only = 30%, were my 1-1/6 on 4-1/4 actually equaled = 42.5 % so it's not as good from the option selling angle at the close as it was earlier today. ---------- It's not so much as I see this as some real hot stock, as that I've messed with her so much I got a feel for her and that means a lot. --------- Jim