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Technology Stocks : USRX /COMS - and other "stuff"
COMS 0.00130-18.8%Nov 7 11:47 AM EST
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To: John Meares who wrote (4329)5/28/1997 7:40:00 PM
From: Glenn D. Rudolph   of 5244
 
I got caught with covered calls - I have been chasing higher covers ever since. Maybe I should eat the current covers and go uncovered. (Current cover is June 85, and stock is at 88+) :-( Is life really that great? :-)( John, Your situation sounds very familiar. I have/had the same problem with ASND. There is typically a strategy to work out of this with as little loss due to the calls as possible. However, as of today, the highest strike price for June is 85. Clearly, if you knew USRX would continue up significantly, you would pay to close the calls and let it run. It would be very sad if USRX did not run prior to expiration or even consolidated a bit. I do not have a strategy due to the limited strike price unless much higher strike prices are opened tomorrow. Here is the strategy. One would sell in the money puts such as 90s to pick up the time premium and continue your upside potential. You would intern, wait until USRX is far enough from the strike price of 85 so no time premium exists, close the calls and sell those shares. If USRX continues above 90, you sell 95 puts etc. Each time you pick up time premium and you have not added exposure. You do not have that luxury:-( I don't know what to say because I do not know where USRX will end up on expiration. Good luck! Glenn PS I had that option on ASND, lost a point of time premium on 50 calls (I sold them 2 3/4 so that was a profit too) but picked up 3.5 points of time premium plus the upside move on the stock within the money 60 puts. If ASND goes above 60 tommorrow, I sell 65 if they exist, etc.
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