Stock Option Advisory

A Company in Transition – Dell Computers – Covered Calls

Dell (DELL) shares opened over 3% higher today following the company’s positive earnings report last night. The stock fell to a 1.5% gain as of 1 pm. The computer maker was able to beat estimates for sales and earnings in the first-quarter. The company also announced it would cut 8,000 jobs in the coming year. Some analysts, however, have expressed their displeasure lately as Dell is lowering its expectations by selling at lower margins. Some market watchers feel Dell’s abandonment of direct sales in favor of low-margin retailers such as Wal-Mart (WMT) is emblematic of the problem.