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  • Suggest You - DELL Daily Chart - Covered Call Example #3

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    deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like grow
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    NOTES ON DELL COMPUTER (DELL)
    Covered Call

    1. After dropping out of a higher trading range, Dell trades
    down throughout the months of December 2002, January 2003 and
    into mid-February 2003 before bottoming out. During this period
    of time, the drop was a low volatility, gradual one in which the
    stock loss could have been well offset by premium collection.

    2. After rebounding off a low around $22.50 in mid February,
    Dell rebounded quickly to the $26.00 -$27.00 level where it
    consolidated until mid-March. The stock traded in a tight band
    until starting to trade up.

    3. After the consolidating period, Dell began a slow, deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like grow
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    ry 2003 and
    into mid-February 2003 before bottoming out. During this period
    of time, the drop was a low volatility, gradual one in which the
    stock loss could have been well offset by premium collection.

    2. After rebounding off a low around $22.50 in mid February,
    Dell rebounded quickly to the $26.00 -$27.00 level where it
    consolidated until mid-March. The stock traded in a tight band
    until starting to trade up.

    3. After the consolidating period, Dell began a slow, deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like grow
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    have been well offset by premium collection.

    2. After rebounding off a low around $22.50 in mid February,
    Dell rebounded quickly to the $26.00 -$27.00 level where it
    consolidated until mid-March. The stock traded in a tight band
    until starting to trade up.

    3. After the consolidating period, Dell began a slow, deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like grow
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    where it
    consolidated until mid-March. The stock traded in a tight band
    until starting to trade up.

    3. After the consolidating period, Dell began a slow, deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like grow
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    deliberate
    rise over the course of the next 9 months or so, with most
    months showing an overall trading range of $2.00 or less. The
    long, slow, step like growth pattern can be seen both in the
    daily trading ranges, as well as in the monthly trading ranges.
    This is very favorable to writing covered calls.

    Conclusion: Dell spent the better portion of nine months trading
    up in a manner that is suggestive of decreasing volatility.
    Because the stock was in an up trend, and a gradual one at that,
    a buy-writer would have been able to profit from capital
    appreciation as well as a having a good chance at seeing a
    positive return in terms of the collection of premiums.

    Furthermore, during Dell’s down cycle, the stock traded down
    slowly enough to be able to receive several months of premi

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