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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: FaultLine who started this subject	5/16/2001 9:38:10 AM
From: Tom Chwojko-Frank	of 5205

Does anyone have any information or ideas about selling calls to cover employee stock option grants? Any references to tax implications of those calls? Pending further research, I'm assuming they're just short term gains. My current thinking is that as long as I sell a call at a strike that I'd be comfortable selling the stock anyway, I can generate income with little risk. I'm also thinking that the calls ought to be less than two months out, so there is less necessity to buy back the calls if I suddenly need to exercise the options for some emergency. So I can generate income every month or two (as long as the underlying is near my comfort zone), hang on to the options, and never really need my cash involved. I'm worried that I'm missing something here. It seems very low risk/high reward. (Which I suppose is the point of stock option grants.) Tom CF

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