SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : The Critical Investing Workshop
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: im a survivor who wrote (10661)4/3/2000 5:08:00 PM
From: Voltaire  Read Replies (1) of 35685
 
KG4,

First of all, the only time to use this method to render a margin call worthless is WHEN YOU GET THE CALL. Never anticipate a call, just wait until they knock on your door. No reason to panic, you have about 5 days in most cases.

Everyone can criticize this method but before you do, realize, THE ALTERNATIVE SUCKS. although this can be turned into an offensive weapon, it is primarily a BUYING TIME WEAPON.

You did not give me the amount of shares but I will assume a thousand shares and let's assume you have a $10,000 margin call.

Simply go out and sell the Aug 55's ATM and pick up approximately $22,000. That will give them their ten thou and give you a buffer of an additional ten. The key here is to go far out that there is plenty of time and intrinsic value in the call because you will use that 25 to 30 % appreciation to buy back the calls GRADUALLY once the market turns around. THIS IS ONE OF THE TWO TIMES I WOULD EVER BUY CALLS BACK WHILE THEY ARE ASCENDING. The other is when news is so dynamic that you can not afford not to. News like NOK etc.

You can do this until the cows come home. Like I said the alternative sucks.

P.S. - You also picked up $20,000 in buying power after paying the call.

V
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News