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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: Dan Duchardt who wrote (2812)	10/20/2001 4:36:57 PM
From: JGoren	of 5205

dan stated what is basically my understanding. the point above exercise price at which automatic exercise takes place may be different from broker to broker. the reason automatic exercise is set somewhat above is the assumption that the holder doesn't want to exercise, if e.g., closing is 1/8 pt above strike price, because the transaction cost still leaves no room for profit upon sale of the underlying security on Monday. the kicker is, as mentioned previously, any news that is announced after Friday close or anticipated news, that would give the stock price a lift on Monday morning that would allow a profit. Dan is also correct about exercises being done on total brokerage house position.

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