Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 168.79

+0.4%

11:21 AM EST

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To: MileHigh who wrote (49837)	11/14/1999 7:41:00 AM
From: 100cfm	Read Replies (2) of 152472

<It is a bit more complicated than you all have proposed> i'm sooooo glad you said this. i'm still wrestling with this concept. isn't there an optimum ratio to the number of calls you should sell vs. the number of shares you own. lets say you own 5000 shares. you sell the dec. 400's for 32 lets say it goes up 30 points the next day to 408. now you have to buy them back at 50. shouldn't you have sold calls on only half your position this way your stock appreciation will always be much greater then the premium lost. so you would have done the following: took $32 on 25 contracts for 80,000. you pull this out of your account.(right away) you buy back 25 contracts at 50 for a loss of 18/contract for a 45,000 net loss. your stock has appreciated by $150,000. your account is still $105,00. to the good. you have 80,000. tax free! is this what you're trying to get through my thick head or do i still got it wrong.

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