Mike, Given your parameters, the call sale looks like a layup. However, if you are wrong, here is what could happen. Somebody offers $80 and you have to deliver stock for $50 when the call holder, probably Mohan <g>, exercizes. Buying at $80 and delivering at $50 is a bummer. Of course, if the stock goes for less than $59, you make money, and less than $50, all the money.
My worry would be that the risk outweighs the potential gain. If you know the situation well, that can still be a smart thing to do, but it is not a good general practice. |
