Jill / Thread : I am considering covered call writing ( which I have never done before )for my QCOM shares after the next increase in price to hedge against another decline. There may be an opportunity over the next week with the analyst meeting. If QCOM goes to $150+ , then I would use the CCs for April 170 or 175. What would you suggest OTM CCs, then I should be more bullish on the stock, however if I am bearish or mildly bullish on the stock, then I should use ITM CCs. I feel that the stock will go into the 150s and then decline again until at least the AGM or the New Orleans Wireless show. So, let's assume QCOM goes to $155 during the next few weeks then I would establish the April CCs at $175. If the price declines to $140s, perhaps this would be a time to buy back or just let the calls expire and take the premium.
In summary, I appreciate your feedback / suggestion on the QCOM CCs:
1) Is it better for ITM CCs ( my only concern is getting called on my shares ) during the next decline of QCOM?
2) Would you suggest using this strategy for both tax sheltered and taxed accounts?
3)If I am concerned with having my shares called, then should I look at April 180s or July 200s as OTM CCs?
TIA,
David
PS: If there is another post on your thread that someone has already gone through this process, then please point me to it.
PSS: I probably would only cover 1/2 my shares to get the feel of what is best in the next few weeks.
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