Just love your options discussions... why, between you, Poet and Voltaire I am in awe! Thank you all from an options beginner.
I have a CC quandary that I'm sure you have addressed previously, so if anyone has any clues or could point me to a link that discusses this, I'd be grateful.
Here it is:
If I've a written a CC on QCOM with an April strike of 155, say, and the price goes to 165 next week, do I get called at that time? I'm thinking not... I am thinking that, so long as the price is below 155 on the expiration date, I won't get called. Even if the price goes back to 200 in the meantime, (I wish, I wish!), so long as it closes below 150 at expiration, I won't get called. Is that right? This has always been a confusing issue for me... silly huh?
Also, I read somewhere once that tax wise, writing a CC may be considered a constructive sale by the IRS and capital gains could be due at the time you write the CC. If true, this seems very nasty to me since when you eventually get called, or sell voluntarily, the IRS puts its hand up to get paid at that time. I'd sure appreciate any pointers anyone may have on this...
Many thanks in advance. Still pondering... |
