Ken,
I've not had such a deeply ITM position before but it is interesting to me (in a perverse sort of way) that the claim that the farther ITM or OTM a call is, the smaller the time premium will be is supported by this QCOM move (see McMillian, Fig. 1-2, p.11).
I'm certainly learning from this discussion--this post from you and the others which follow. Thanks for doing it.
As you will recall, this was the scenario which worried me, though I certainly did not expect the Nokia news for sometime. I thought some things on JGoren's list, his post a bit later on, were more likely to pump Qcom into a higher trading range near term.
I've also read Dale Russell's later post and found it very helpful.
I would love, to say again, to write ccs on Qcom. It's our largest holding. And I would do so if I thought there were only downside risk. Right now, even given the state of the market as a whole, I worry about the upside risk. And am writing ccs on Gemstar and Siebel, which are, incidentally, in the money right now. But I'm waiting on them.
John |
