Excellent point about volatility presenting great trading opportunities. Every opportunity is tempered by risk; and effective risk control separates the good from not so good traders/investors. Compare these two stocks on the issue of volatility. Since January FDG has moved from 31.00 to 96.00, a triple. CLL has moved from 2.50 to 5.00, a double. During the past seven months FDG has been the more volatile stock. Typically, higher volatility carries greater risk. However, tools like options can be used to control risk (like the trade that I described above), making what appears to be a more volatile stock less volatile…….and less risky. In comparing CLL with FDG there is only one choice because only FDG is optionable, CLL is not. That’s just one more reason to choose FDG. With CLL you can only use stops to control risk.

Last but not least is “position size”. A “double” in CLL from 2.50 is still only 2.50. In order to really make money in raw dollars you have to buy a LOT of the stock. But how much of your total capital can you afford to tie up in CLL in order to experience the joys of a “ten bagger” (if we should be so lucky)? And if you tie that much capital up in CLL how much of it do you lose if the price moves from 5.00 back to 2.50? It’s always 50% regardless of whether it’s $5,000 or $50,000. That’s an awful lot to lose on one trade, especially if it’s a big bet. “Position size” is a component of trading/investing that is very little understood, even by professionals. I recommend that everyone read “Trade You Way to Financial Freedom” by Van Tharp. Don’t feel badly if you don’t understand everything in the book when you read it. I didn’t. You should be able to get it at a university business library.

Best of luck with CLL, especially if you’ve “loaded up”. Use stops.

That looks to me like good advice and I guess some of the others might use the technique you have pointed out. Unfortunately I am not a trader of any sort and do not know enough about that game to participate. Maybe one day I will do the necessary to learn more but these days I am just too busy. It is more of a hobby for me although I have done OK so far and after three years still consider myself in a learning curve. Thing is I am not sure we should be comparing CLL to FDG as they don’t seem to me to be similar at all. I do agree however that CLL is today a speculative stock and has done nothing over the last couple of years. However please correct me if I am wrong but I did think that volatility is a traders friend and the ups and downs of a stock like CLL drums up great oportunities for you guys.

Den

Alternatively, don’t sell the call, just buy the put when you buy the stock…..it’s cheap insurance.