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Non-Tech : The Critical Investing Workshop
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To: Voltaire who wrote (8167)3/19/2000 8:09:00 PM
From: uel_Dave  Read Replies (1) of 35685
 
Thanks V for Part 5 - Just a couple of points of information /questions:

Bebo must assume that he can buy back the calls during the April expiration at $11.5 ( I assume that he sold the April 132s at $14 on 15 contracts) to provide his $3700 for the house and car. Does Bebo buy these back at $11.5 or less on the Thursday before expiration day or sooner? What happens if QCOM is greater than $146 at expiration? What will Bebo do then since he has already spent the $3700 and must pay a higher price to buy back the calls, if he wants the stock. Would he roll up the call or just use his margin ( since his stock has appreciated ) to buy back the calls if such news has increased QCOM stock price to pass the combination of the previous strike price plus premium?

TIA,

David

PS: Tom, I realize that we are not trying to get the nth return out of the return out of the call, but some months we win and others we lose and must have a contingency plan.
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