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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe
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To: Ira Player who wrote (1039)8/6/2004 10:11:36 PM
From: RWS  Read Replies (2) of 1064
 
Hi,

I think I need some help with options. The results of my last trade lead me to believe I'm confused.

I bought 1000 shares of ERF @29.28 and sold Aug25 calls for 4.10. The exdiv date was today 8/6 and the calls were exercised. The dividend is 0.164 per share.

I lost 224.69 on the trade. I calculate the other side made 614.00.

I want to hold ERF for dividends and sell calls to protect downside. Should I have sold out of the money calls instead?

Thanks in advance.

RWS
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