How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: NateC who wrote (11681)	10/21/1999 2:06:00 PM
From: FruJu	of 14162

In other words..do I LOSE the long call altogether,....or just sell it at market, to the broker.....when he automatically exercises me? If it comes down to you making money versus the broker making money, the broker will win every time. It is nearly ALWAYS better to make sure a situation like this doesn't occur with calendar spreads by buying back the short calls (even if at a loss) and selling a month or two further out to pocket extra time premium. (As noted in another followup, the only exception is if the price has really rocketed on you, and you would be looking at a huge outlay to buy back the short calls, plus the time value of the long call has diminished to almost nothing).

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