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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: Gary E who wrote (9797)	3/1/1999 8:06:00 AM
From: Herm	Respond to of 14162

Well Hal, Splits do nothing against the stock? Well, I differ with you on that opinion with careful observations and sources. Here's what readers can do to determine for themselves. You take say three months of average monthly trading volume. You look up the company's float. You divide that float (# of shares) value by the average shares traded (3 months) and you will find the float turnover (TRO). You can do it for any stock and get the TRO value. Going into a split or news announcement, stocks with lower TRO values will always move up or down faster because of the massive turnover of shares. It is relative between any stock. CPQ the other day moved 27 million shares and the stock dropped 5 1/2 points (-13%)in one day. That is low TRO at work! On Doug's web page there is a TRO calculator. I gave him the idea for the formula after I learned about TRO from a paid subscription I sampled for a year. They used TRO to determine the measurement of the momentum of any stock. The longer it takes for the stock to trade 100% of the outstanding float the slower the price movements associated with the stock. The shorter, the more volatile the stock price movements. Tech stocks tend to have lower TRO numbers. Retails, etc. are middle of the road. Oils right now have slow TROs. etc. The point is, if you want to know how fast a stock will move up or down against you, check out the TRO. After a split the TRO tends to eventually slow down the stock price movements until it regains a new pace. More float, more trades are needed to move the stock. That is why small floated stocks move up and down by MMs and funds to the determent of the small investor. PS - My story does not change about covered calls or WINs. CCing is the the bread and butter winner and the focus of this forum. Although, CC is not the only way to make a profit. It is difficult to cover the wide range of possibilities around options. But, I do think I have focused around everything that does work around this WINs approach tool shed.