Well, I have an answer for you to solve your 1.2 Million problem. How are you going to pay me for the consulting fee ?
Sell 10000 shares of your option at market open tomorrow morning, and assume the stock price is still $120. You will have a profit of $600000 with strike price of $60.
For the rest of 10000 shares , hold it till the end of expiration and exercise them with
the profit of the first 10000 shres sold as option. Then after you exercise the rest 10000 shares at the expiration date , the 10000 shares in your account will have a market value of at least $600000, if we assume the stock price will continue go north
between tomorrow and the option expiration date. After you exercise your second 10000 shares, then buy back the 10000 shares on margin , which you sold tomorrow
as an option. So, you will end up with 20000 shares in your account with 50%.
However, you will need to pay tax on the profit of $600000 which you generated when selling your first 10000 shares as option, which is around $170000 by April 15 of year 2000. So, technically speaking , you make a loan of $170000 from Uncle Sam to exercise your 200 contracts, and you need to pay back the loan by April 15th of year 2000. With 20000 shares in your account, you can make that amount if stock goes up another $9 . Well, you still have 10 months before your loan is due, QCOM may go up much higher than $9 !!!
Congratulation.
I do this to my Microsoft holdings too!!!!!!!!
This is the best strategy to get into stocks. |
