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To: Voltaire who wrote (7768)	3/17/2000 9:09:00 AM
From: Eylon	Read Replies (2) of 35685

Hi Voltaire, Yes, and don't forget if it goes to 160 by expiration and you buy your calls back you will also get a third of that appreciation over $132. As a lurker here I see you claim times and again that you get a third of the appreciation and I don't know where this is coming from? can you explain it better? Lets take the above case, and here is my take on it. You buy QCOM for 130, you sell 132.5 CC for 11.5, just before expiration you when the stock is at 160 you buy back the call for 160-132.5= 27.5. You now have 160 stock with 11.5-27.5= -16 as debt so you have $144 for each stock, exactly as if you were called and got 132.5+11.5 = $144. Where is the third more? As I see it the only thing you may have more if you buy the call is more margin. But in the above case even on margin you come out losing. When you bought the stock assuming 50% margin on QCOM (a wishful assumption in most cases) you had $65 margin now you have $80 margin but you are $16 in the red (27.5-11.5) so your margin is only $64. Did I get it right? or there is another hidden point that I missed? Eylon

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