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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: NateC who wrote (10785)	5/14/1999 9:41:00 AM
From: Jonathan Thomas	Read Replies (1) \| Respond to of 14162

<<<<< JT...you wrote <700 shares NOVL @ 23 (Purchased on 5/7/99) Sold Aug 25 Calls @ 2 3/4 (5/10/99) Bought 7 June 20 puts @ 3/8 (5/11/99) > Assuming your June 20 puts expire in June.....are you going to get other protective puts after June expiry....or do you hope to buy back the calls after the stock runs up.?? What's your strategy overall. BTW....the puts seem like a good play...classic WINS sideshow >>>>> NateC, I plan on NOVL trading within the 20-25 range over the period of the calls I wrote, so my plan is to sell the puts at a profit on dips (looks like the dip is starting now), buy back the calls at a discount (if the price has dropped enough, below 1) and wait for the stock to come back up, do it again. If the stock tanks, I'll hold the put until the bounce, and sell it to keep my downside protected. If the stock shoots up, I'll have to see where call prices are. I may let myself get called, and try to get back into the position when it looks good. Or, I'll try to roll forward. At a dip,however, depending on the price I can get for the puts, and if I get a small price when buying back my calls, I may buy long calls at the 27.5 strike to protect from a runaway. But, I need to wait for the dip to do this, to get them cheap. I think it's a careful balance between protection, and eroding your profits. I believe in moderation. I don't want to protect every possible scenario only to make $1000 on this deal, not to mention give all my money to the broker. I'm confident this stock won't drop to 10, but the puts are nice to have. I DO PLAN on making a profit on them however, they are not for protection alone. Ryan