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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: Herm who wrote (10357)	4/14/1999 6:22:00 PM
From: Dan Duchardt	Read Replies (3) \| Respond to of 14162

First, or those of you still seeking that perfect online broker, I will mention that I have been using myTrack mytrack.com for data feed for the last month, and their "trading contest" for a controlled way to paper trade (i.e. you are depending on their system for executions pegged to buy at ask and sell at bid). With the real time gold service @ $40/month plus exchange fees (NYSE=5.25, NASDAQ=4.00, AMEX=3.25, and OPRA=2.50 {options quotes from 4 exchanges if you choose to display them all}), I'm getting good (not perfect) reliability. There are all kinds of configurations for greater or lessor cost, but you can download the software and get delayed quotes for free to check out the interface, which I find to be quite good. You can even get a free current quote on stocks using the "extended quote" feature. Plus, they have people on line all the time to HELP with problems, a feature many online brokers seem unable to comprehend, and several chat rooms to share ideas. MyTrack just turned on their live trading platform last week. Initial feedback seems to be positive. I have not used the live system, and have not decided if I will. No, I don't work for them, but they do pay a bounty for referrals, so if you want to check them out and mention my name, I'll take anything they send my way LOL A case the experts might care to comment on: This does not seem to be quite the WINS way, but I did pay attention to the principles, as much as I now understand. Yesterday CYCH blew out the upper BB and the RSI crossed above the 70% line. Today, the predictable retreat took place following a gap up at the open. My guess is the stock is going to move sideways for a while, till the bands adjust to the huge moves of the last few days, or possibly retreat a bit more before moving forward again. This afternoon I noted some hefty call premiums available and decided to take a plunge (on paper). I bought 1000 CYCH at 19 3/16 (too soon, but Oh well- I was expecting support at 19+ based on earlier in the day lows) and as fast as I could sold 5 May20 calls for 2 11/16 and 5 June22 1/2 at 2 5/8. So I had two 500 share lots with NUTs of 16 1/2 for the Mays and 16 9/16 for the Junes. The upside potential on these were 21% for May and 35% for June (no margin). Looked attractive to me! Then the afternoon sell off set in, and I got interested in further protecting my downside. Without the benefit of time to crunch the numbers, while CYCH was dancing around 17, I bought the May20 for 1 7/8, bought the June22 1/2 for 2 1/8, sold the June17 1/2 for 2 9/16, and sold the Jun20 for 2 11/16, reducing my NUTs to 15 13/16 and 16 for June. Of course, I gave up a LOT of upside potential (that didn't look likely to be realized at the time), but still it's 10% for May and 25% for June (no margin). CYCH rebounded to 18 3/16 by the end of the day. My guess is that the May 17 1/2 will be exersized if I do nothing, and the June 20 could expire, but not likely. Any comments about how better to have gotten into the position are welcome, and suggested alternatives to the buy back and sell again phase, but mostly I'm interested in how to play things out from here. What should I look for to trigger additional action, and what should that action be? Thanks in advance