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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: Vegas who wrote (9855)	3/4/1999 4:59:00 PM
From: Herm	Read Replies (3) \| Respond to of 14162

TDFX has a 23.33% growth rate and a PE of 20. It is selling for less than other companies in the same industry group. NASDAQ: (TDFX : $13 1/2) $170 million Market Cap at March 4, 1999 Trades at a 53% Discount PE Multiple of 20.1 X, vs. the 42.8 X average multiple at which the Software & Services SubIndustry is priced. Yes, the BB narrowed quit a bit and with the RSI low an upward gap is usually the case. Now, here is a perfect example of the low TRO which is the turnover rate of the float. I used Doug's calculator at this web site again. TDFX has a TRO of 19.97 days which is very fast price moves because the stock only needs 19+ days to turnover 100% of entire outstanding float. Splits do impact TRO and the rate of price moves. Compare that to BTGC's 89.46 days, IMFX's 34.69 days. TDFX is a jack rabbit when it comes to explosive moves. You did not mention your net cost so it is hard to determine your best recourse. The time factor is your strike price plus the amount collected before you start losing money. So, $12.5 + say 1.5 = $14.00 before you are forced to act. If you need to cover because your net is higher then it will cost you around 1 1/2 and climbing. A second round of CCs for the 15 June @ 2 1/2+ would give you some room to breath. Cover and then wait until that premie goes up! That would not take long at all. There is bound to be some major over head price resistance at $15.00. Because of the time left until options expirations you will need to act this week. iqc.com