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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: TShirtPrinter who wrote (3045)	11/16/2001 6:23:58 PM
From: Andrew N. Cothran	Read Replies (2) of 5205

Guess I have to agree with you Tony. Yes, tax sheltered. But I will rebuy them at the earliest opportunity and then continue to sell the calls against them as seems appropriate and timely. So, I pick up .60 cents per share on the trade and lose the stock for .08 cents. I can live with that. As long as I get a chance to buy them back. My commission charges for a 2000 share lot is only $14.95. So, here is the math. I get called for $60. I pocket .60 cents. I pay $14.95 commission on the sell side plus the $15 dollar commission on the sale of the calls. This means that I can buy back the 2000 shares for a price of 60.59 without losing anything. Anything below 60.59 will be my "profit" on the trade. Penny ante stuff, for sure, but that is the way the game is played.

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