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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Eric Berry who wrote (1334)	7/5/2001 8:29:50 AM
From: FaultLine	of 5205

Hello Eric, Welcome aboard -- I think you'll find you have come to the right place. If not assigned, I make $220, and have 200 shares of stock. If assigned I sell 200 shares for $2000 - $45 Assignment fee - $30 Commission to close option - $12 Commission on stock = 1913 (for a loss of $23 + my $220 premium)?? You just about have it right but I think the "If Assigned" case needs a little adjustment. In my opinion, the $45 assignment fee covers the entire cost of closing the position so the $12 and $30 charges you listed are not necessary. This raises the final value to 2000 - 45 = 1955 for a profit of 1955 + 220 - 1936 = 239 which is about 12% on your $1936 investment in six weeks -- certainly can't kick about that. I personally recommend you take 50 bucks of your profit and buy McMillian (see thread header). Read chapters 1-3 -- these quickly ramped up my understanding of covered calls. Cheers, --Ken/dfl

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