Qualcomm Incorporated (QCOM) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 166.81

-4.1%

Nov 17 3:59 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Andrew N. Cothran who wrote (121029)	6/26/2002 9:24:33 PM
From: Stock Farmer	Read Replies (1) of 152472

Hi Andrew, Thought so. So you've attracted capital gains that might have been triggered by a sale in the first place. Presumably financed from some cash pocket somewhere. And you've bought back - meaning that you also absorbed the cash difference between strike and market price from some pockets somewhere. In this case, both times at profit. Appears you'd have been better off if you'd just dumped all your shares and written those same calls on QCOM (with the same buybacks, if any) covered by the resulting cash. Because as you point out, you would have been able to satisfy the only two times you would have been called at a profit. Comparing apples to apples. Thus the difference in the two positions would be the difference in underlying asset value, in this case about $27 a share. Give or take some niggly tax details. Writing calls against a long position in QCOM was indeed a preferable strategy than just sitting pat. But that doesn't make it a great strategy compared to alternatives that involve, for example, not owning QCOM. Indeed, it's the initial "I'm holding QCOM Long" decision that attracts the "wed to stock" criticism. Not the "Now that I'm long, I'm doing everything possible to maximize my gain" activities that follow. John

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next