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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: FaultLine who wrote (1)4/19/2001 2:02:07 AM
From: BDR  Read Replies (1) of 5205
 
For Dummies - my kind of thread.

I had SEBL April 30's that I had sold for $3.10 and which I bought back for $5.50 on April 16. I thought about rolling out to the May 30 or 35 but decided to just take the loss and step aside. I took smaller losses closing out my CC's on GLW and JDSU. I sold RMBS APR 25 calls for $2.15 and they looked like they were going to expire worthless for sure, but now even that stock is making a run. I still have NTAP APR 15 and AVNX APR 12.5 that I was going to roll out/up this week before Greenspan made his move.

Your SEBL 25s show an ask of $9.50. You could roll those out to the May 25s (bid $10.40) for a net $.90 if you thought there was going to be a pull back by then. Or go to the Aug 30s (bid $9.40 net -$0.10). I can't say that either is really attractive. You are facing the same problem I am with my deep ITM positions. I think there might be a sell off tomorrow or the next day so I am waiting to see if the spread widens and will either buy back for a loss, roll up/out, or allow the calls to be exercised depending on what happens and the stock. I have ITM calls on NT and I am going to let someone else have them. Taxes may or may not play a role in your decision. I have significant gains from covered call writing over the last four months so a loss is of some value to me in my taxable accounts.

Unfortunately today is one of those days when I would rather be opening new CC positions and not trying to figure out how to extricate myself from existing ones. Proof that I am a Dummy and why I need this thread. Thanks for starting it.
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