Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 86.56

-0.7%

11:52 AM EST

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To: hdl who wrote (87204)	12/1/2003 12:50:07 PM
From: Dr. Id	Read Replies (1) of 93625

your 3rd paragraph should say at $30 strike- to make clearer without thinking. btw- the $5,000 I think is taxed as regular income. You don't have to buy the stock at $30, because you have 1,000 shares. You are selling covered puts. You're right that the $5000 is taxed as a short term gain (regular income). However, if the stock is below 30, you still have to buy the 1000 shares at 30, regardless of whether you hold 1000 or 10000 shares. You have to have enough equity in your account to cover the 30k. If you were BUYING puts, they would be covered by your 1000 shares.

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