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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: john rieck who wrote (13112)	4/27/1999 12:55:00 PM
From: HoyaBob	Respond to of 41369

Covered Calls: I've made money and lost money on covered calls, especially on AOL. My advice: because of its volatility, and unless you con monitor AOL stock on a fairly constant basis, don't sell covered calls on AOL. Now, you could consider spreads, straddles, etc., but I'm a neophyte at this stuff. I've used rational strategies before: zbs. sell out of the money call w. about 20% appreciation built in, for no more than 90 days out. Trouble w. AOL, and most internets, is that when they rocket, you have locked in your potential profit and your greed makes you feel cheated out of the other 80 percent (true story for me). My latest fiasco w. AOL had to do w. having to buy back nearly $90,000 in calls prior to April expiration, or have AOL called. I was "so smart" getting a $20 premium for AOL April calls in December, and "so stupid" having to pay $116 to buy them back. In an up market, calls simply don't help you much. They are a nice hedge for limited down markets.