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Technology Stocks : CAWS - Wireless Cable (New and Improved)
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To: Bexar who wrote (383)11/20/1996 11:49:00 AM
From: .com   of 5812
 
"I'm a little brain fraggled, doesn't this mean that the person buying the call would make the profit between the
strike price and up? Do you make the profit between your buy price and the strike price when the stock is
called from you? If the person sells the call for a profit, don't you lose the stock? Do you still get your
premium if the stock is called from you?"

If the stock is called for you on the June 5 Calls you get $5.00 for it (realize it could be worth $10 at the time, but you'll just $5). So yes, you get the profit from your strike price and the price you bought it at.

If the option is not exericised you then get to keep the stock and could then write another covered call on it.

Hope this helps.

PS: Be careful doing this stuff through E-Trade if you are just starting out with options.
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