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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 (10588)	4/30/1999 8:42:00 AM
From: Herm	Respond to of 14162

WOW! BYND - CCers beware! BYND is not for the faint of heart! It does tote a 60% growth rate and earning losses have been improving. But, it still is in the red. NASDAQ: (BYND : $27 3/16) $743 million Market Cap at April 29, 1999 Loss Expected for 1999; Software & Services SubIndustry priced at 43.9X PE. Technical charting is difficult since the stock has not been in business long enough to form a trading pattern. Thus, you have high CC premiums for that extra risk. BEYOND COM CORP (NASDAQ:BYND Last Sale: 27 3/16 -1 9/16) BYND Trading Summary 29-APR-99 Ticks Money Flow($MM) Avg. Price Small Blocks +201 -207 +3.5 -3.3 $27.0297 Large Blocks +5 -6 +2.0 -2.4 $27.0349 Total: +206 -213 +5.5 -5.7 $27.0312 28-APR-99 Ticks Money Flow($MM) Avg. Price Small Blocks +189 -186 +2.4 -2.9 $28.4767 Large Blocks +0 -1 +0.0 -0.3 $29.0625 Total: +189 -187 +2.4 -3.1 $28.4932 bigcharts.com The best I can determine about the BYND chart at this point is a low price support at $24 with a declining RSI. BYND is still on the way down cycle towards the lower BB and the blocks, ticks, and money flows concur with that fact. A possible entry point would be at $24 unless some negative news hits the stock. Raise Cash - Lower Cost Hummm? Speculators might want to write some BYND PUTs for say 22.5 JUN @ 2 1/2+ to lower cost or pick up the stock $22 1/2 - $2 1/2 premie = $20 net if put to you. Turnaround and write CCs at a higher strike price at that point. Refer to the chart! Sneak Into Stock Or, first pick up the 20s June CALLs @ $8 or less and go long before actually exercising the call and CCing the stock. That way, you reduce your exposure to only $800 dollars and not $2,000. You could buy twice as many long CALLs and cash one out! Good luck! We are looking forward to following your experience. Thanks!

To: Jon Tara who wrote (10588)	5/3/1999 8:01:00 PM
From: Herm	Read Replies (1) \| Respond to of 14162

BYND Follow Up! I often look back at post made to see if the stock moved as predicted by my chart reading. The more you look at the stocks for cause and effect patterns, the more astute you will become in reading them. On BYND, I was convinced it would continue a downward move. Daytraders milk BYND by causing wide price swings and stripping profit all day long. It remind me of chumming for sharks. Throw in some chopped up bait fish and soon you will have several sharks in the water. They take small chunks eat time they strike. BYND is about the same thing. bigcharts.com I picked up a new book this weekend. I'm reading, Day Trade Online by Christopher A. Ferrell. The novice investor wonders how people can make money all day long in the stock market. Farrell's Trading 101 chapter rang a bell with me. He writes, "Buy on bad news, Sell on Good News." Like Ferrell, it took me some time to realize that one of the best ways to profit from what you hear in the news is to be a contrarian. There is one stipulation! These trades must be done at the open of trading. This may seem contrary to common sense. From a day trading standpoint, you will be far more successful buying a stock or option at the open that has a very negative article in the paper than you will if you buy one that has a positive spin. This is because the markets will price in ALL available information immediately! Farrells write, "The general public will react by dumping shares with reckless abandon at hearing bad news. You will be far more successful buying a stock" or option contracts "at the open that has a very negative article in the paper than you will if you buy one that has a positive spin. What the general public does not understand is that this phenomenon is exactly what creates a market bottom." Now, how does all this work into CCing? Well, you have often heard me say, "let the trend be your friend." Recent example is CPQ when it dumped for three days. Each day the price swings were massive. You could covered CCs with little intrinsic value left. You could buy more stock or better yet, LEAP calls when the dust settles. I recall my recommendations for CPQ LEAPs selling for $1,000 that five days later where worth $1,300. That's 30% in less than a week! I recall the run up in BTGC and IFMX recently. All I could think of was sell CCs now!!!! People take their money and run! It's crazy, but I really believe it is easier to make money much faster in a down market than an up market. Stocks fall like rocks, but take forever to increase in price. People hate downside pain and fear more than upside greed.