How To Write Covered Calls - An Ongoing Real Case Study! Message Board

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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!

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To: Newton Yuen who wrote (13787)	7/20/2001 8:22:04 PM
From: Howard R. Hansen	Read Replies (1) of 14162

So I guess we need to look for stocks like AT&T and reap a really easy profit by buying a call just before the issuance of new stock shares. Did the buyer of the AT&T 20 strike price call really get that good of a deal? I ask this because you didn't mention in your message what the buyer paid for the option. If he premium was $5.00 then both of you came out ahead. If the premium was $1.00 than he made a good buy. Furthermore when a company is going to have a spin off doesn't the CBOE normally open up two series of options? One for the underlying stock with the spin off and one for the underlying stock without the spin off. This is what the CBOE is doing with Lucent. Hence when you sold your covered call did you check to see which version of the option you were selling?

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