same boat as me... some thoughts on conversion
first, nice if holding only a few and awaiting the split
two contracts now will become eight in a few days
now sell one, convert one shows limited alternatives
friend in same exact position
Friday will show you with eight contracts
you could sell 4, convert 4
you could sell 3, convert 5
you could sell 2, convert 6 (using some extra cash)
converting to shares has no tax consequences since it is a purchase, not a sale... you have no gain at all unless you sell... you instead jump into a strong paper capital gain... cost basis is strike price plus option initial cost
really tough call on holding or converting to shares at the expiration date... we may have some selling in the first or second week of new year, from people who have been waiting eagerly to sell with tax year2000 consequences... then again, after the split, tons and tons of small (naive) investors will be piling into theQ... they are naive not for buying theQ, but for waiting until after the split
when sitting in my Schwab office in Brookline Mass this lunchtime, I overheard some guy singing about QCOM... he intends to buy some shares after the split on Friday... lots of people like this
I am still sitting on the fence as to pulling the trigger and converting to shares next week... I anticipate a brief pullback early in the first week, followed by a big runup again... maybe I will convert half next week, and convert the other half near the expiration
as for converting to shares with options containing some premium, forget it if deepinmoney calls... my Jan280 calls seemed rather pricey on Nov3rd... not no mo... they contain zippo premium, now trading at parity... converting prematurely would however sacrifice some leverage though
big gainer today is Qiao Xing on Nasdaq, up 200%
they plan to build CDMA cellphones for Chinese subscribers
way cool
/ Jim |
