Jill, I appreciate the questions you have posed. I'd love to read more opinions on the subject, as I really need to figure out what to do. It seems that if QCOM does even only reasonably well next year, it makes
sense to convert as many options as possible to shares, wait a year and take gains at 20%. I still haven't sold my Jan 400 calls(now 100). I have huge profits in those and in Feb. and April calls as well. I bought them in order to make profits, but considering their enormous rise I'm considering selling half and exercising half as we go, for tax reasons-- and because
it seems the consensus is that Q could go a lot farther next year. I guess I'm switching strategies midstream--converting the options from a trading vehicle into an investment vehicle. (Does that make sense?) It sounds like the other strategy- putting the money into LEAPS instead of the stock-is more aggressive, involving more taxes now (by cashing out all the options)but offers better return on the money.
You'd still have the tax issue, as I believe you'd have to wait a year from the exercise of that LEAP to get that 20% rate. (Someone please convince me that the tax implications aren't as important as they seem to me right now!) Also, buying the stock gives you the advantage of additional margin. Not sure if that is a significant consideration- I welcome any input!
---I feel a little dismayed/sickened at the abrupt erosion of time premium in the options. BTW, if I'd "sold immediately" when last I asked you about selling/exercising of these options, as Voltaire said, I'd have gotten out at the high for that option. Got confused by his comments on the Q thread about his new price targets so I did nothing. OH well, c'est la vie!
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