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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: alanrs who wrote (364)	5/1/2001 8:28:14 PM
From: BDR	Read Replies (1) of 5205

<<I believe the TQNT was called away today.>> I am having trouble understanding why TQNT would be called away today. TQNT closed at 31.24 and the August 30 call bid is still 7.20. There is still 5.96 of time premium. The person holding the call would do better to sell the call for 7.20 and buy the stock on the open market at 31.24 (net = 31.24-7.20 = 24.04). If they exercise they have to pay out 30 for the stock and lose all the time premium. People do irrational things but normally you are not at risk of being called out until the time premium disappears.

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