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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: Jon Tara who wrote (10575)	4/29/1999 8:09:00 AM
From: Herm	Respond to of 14162

Hi Jon, About option volume? I'm not concerned about the lack of volume as I am about open interest. That open interest will ultimately be the transactions to either close or open your CC. Like you said, the specialist will widen the spread to make the 1/16 to 1/8 point. Yesterday, I limit sell at a bid of 2 1/16 to open for IFMX Nov. 7 1/2s CCs which was right in the middle of the bid/ask. Right away the bid/ask went to bid 2 1/16 - ask 2 1/4. The volume for the day was 40 contracts and the stock trading volume was below normal. I figured they (MMs) would be hungry come the afternoon and would move the stock price down to pick up the bait. I was not going to change my price. Sure enough, 2:00 pm the order was filled in full at 2 1/16. I expect IFMX to slip to $7.00 (according to the BB and RSI) before a reversal with all the internet stocks selling off right now. So, I'm just milking perhaps 5/8s to 3/4s on this CC round before covering. Welcome to the forum. You can review the WINs approach off Doug's web site at webbindustries.com