Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 160.60

+0.6%

9:30 AM EST

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To: Kayaker who wrote (61323)	1/10/2000 6:04:00 PM
From: Wyätt Gwyön	Read Replies (1) of 152472

You still have to come up with a pile of cash to buy the shares. Just use ITM portion as margin equity (not allowed by "paternal" brokerages)...if you are deep enough ITM, not a prob. Another consideration, if you are deep enough, is that you can unlock a lot of margin capacity by exercising (even as you use margin capacity to pay for exercise price). To the extent that you think you can use that extra capacity to a profit exceeding cost of capital (i.e., margin loan cost for exercise vs. "free-riding" a contract which has no more time premium), it can be a reasonable decision. Another possible advantage to early exercise is getting the LTCG clock to start ticking earlier. If your aim is to hold for LTCG treatment (why exercise otherwise, this early in the year?), then the quicker a year passes from exercise, the more flexibility you will have in future. Your mileage may vary.

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