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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 (10914)	5/27/1999 12:43:00 AM
From: NateC	Respond to of 14162

Thanks Herm....you wrote: SCH shot up +$8.00 today bringing the ask up to $44. Since, the LEAP CC (spread) break-even is $100 strike + $42 = $142.00 less comm. So, one could sell a CC for say the SCH 145Sept. @ 7 for a 16.67% return by Sept. exper. That's a 50% ROI on an annual basis. If you are lucky enough to be called out at $145 for another $145-$142=$3.00. So, you pocket $7 + $3 =$1,000 x 10 contracts =$10,000 for a 23.81% ROI by Sept. and you don't have to watch the stock every minute of the day. If I were to play the devil's advocate.....I could point out that if you pay $42 for a $100 Strike price call, with a stock at 108....you are paying $34/share Time Premium. Some people would take issue with paying that much for time premium....in a stock with as dubious of a nearterm future as Schwab. But I sure do like your numbers, and the way you explain these LEAPS vertical spreads with shorter term CC's Herm. thanks

To: Herm who wrote (10914)	5/27/1999 1:24:00 PM
From: phillip	Read Replies (3) \| Respond to of 14162

Herm, Have you seen the huge CC that took place yesterday in PPE? An investment bank apparently bought a million shares of Park Place Entertainment (they are a spin-off of Hilton Hotels and now own Caesars Palace in Las Vegas), then they did a CC using the June 10 Calls and created a straddle by also selling the June 10 Puts. Looks like a good bet.

To: Herm who wrote (10914)	5/28/1999 10:49:00 AM
From: Jon Tara	Read Replies (1) \| Respond to of 14162

Herm, I hope you bailed out of your sideshow puts on HWP. (Did you ever do them?) Take a look at the chart today. Looks like it WAS a flag, though a bit sloppier than I was thinking. Nice breakaway gap from the flag. I did buy my near-term puts, despite my misgivings. Sold them a couple of days ago for a nice profit. (JUST in time - in the morning before it turned around.) I decided not to reverse and go long, though, because I felt it was still vulnerable to a correct to 85.