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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: RDHickman who wrote (10025)	3/21/1999 11:11:00 PM
From: NateC	Read Replies (2) \| Respond to of 14162

Thanks Dick for this post. Roger is fine ----- you wrote "What are your expectations? You didn't pluck in out of the air, did you? I FOUND VLSI IN INVESTOR'S DAILY'S LEAPS SECTION....I LIKED THE RELATIVELY LOW PREMIUM ON THESE LONG LEAPS.....jAN 2001....AND WAS THINKING OF THE "POWER" OF OWNING THIS STOCK SO INEXPENSIVELY....AND DOING SIDESHOWS....INCLUDING CC'S (LATER)......AFTER BUYING THE LEAPS. YOU'RE RIGHT....IT IS NOT A CLASSIC "WINS" PLAY. THE CHART IS NOT ALL THAT BAD.....AND THE COMPANY'S EARNINGS PER SHARE GROWTH IS QUITE DECENT. THEIR CASH FLOW/SHARE HAS BEEN STRONG. I'M A LITTLE BOTHERED BY 1998'S NEGATIVE FREE CASH FLOW/SHARE (THIS FOR ME IS A VERY VERY IMPORTANT INDICATOR....BECAUSE IT'S BASICALLY CASH FLOW FROM OPERATIONS...ANDINDICATES HOW THE CORE BUSINESS IS DOING). VLSI has a thread here on SI. Ask yourself - What is being said? Who is saying it? What are the company's Fundamentals? Who is the leader? And the Technicals - What picture do you get? The Chart at iqc.com. is DIFFERENT! Herm's W.I.N.S. candidates have a much different chart structure. VLSI - The narrowed bands which represent a formula that calculates the momentum and volatility, appears to say there is little of either, even tho it shot-up recently (why?). The RSI is 95 +. Volume has been going down, with slight up-tick on Friday. If I understand it correctly MacD is based on the same statistics as RSI, so that represents the same data. (Does anyone use a different (cross-reference)indicator on their charts? Same stuff twice seems a waste. Anyone have a recommendation?) I'M ONE OF HERM'S BIGGEST FANS. IN MY OWN EXPERIENCE HOWEVER.....MOSTLY IN LONG INVESTING IN EQUITIES (I'M PRETTY NEW TO OPTIONS)...BOLLINGER BANDS AND RS ARE NOT ALL THAT USEFUL. I'VE USED THEM FOR 5 YEARS WITH TC-2000.....AND LIKE OTHER INDICATORS BETTER. The Jan. 01 Leaps at 20 or the 22.5's are just items, without more information. If you are thinking of purchasing either one. Your considerations would include: If you purchase the 20 @ $1.44, the value you need to protect is $21.44, the Strike plus the premium paid. I would think you would be looking at Writing a $22.50, or more, conventional call (or a Leap). If you purchase the 22.5 @ $.81, your value is $23.31, the Strike plus the premium paid. I would think you would be looking at Writing a $25, or more, conventional call (or a Leap)." I WASN'T REALLY THINKING OF A CC PLAY AT THIS TIME DICK.....I WAS THINKING OF HOLDING THE LEAPS AS A LONG POSITION...I ALWAYS ALWAYS ALWAYS FOLLOW WILLIAM O'NEILL'S ADVICE...AND SELL MY LONG POSITIONS WHENEVER THEY DROP 8%......SAME WOULD PROBABLY BE TRUE HERE......ALTHOUGH I'VE NOT OWNED LEAPS BEFORE.....BUT IT'S A LONG TIME UNTIL JANUARY 2001, AND THERE ARE LOTS OF SIDESHOWS, CC'S, CHEAP UPSTRIKE CALLS, ETC......THAT COULD BE DONE BEFORE JAN 2001. LET ME KNOW IF I'M NUTS!