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Non-Tech : Any info about Iomega (IOM)?
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To: Rajendra KRISHNAN who wrote (30392)9/18/1997 11:17:00 PM
From: Jon Tara   of 58324
 
A writer of the 25s can't lose money if the stock closes above 25 at expiration. So, no, this doesn't make sense.

If it closes above 25, the stock will be called. They will be paid $25/share for their stock, and they will also retain whatever premium they received when they sold the calls.

Alternately, they can buy the calls back before expiration, presumably for less than the sum of what they sold them for and the increase in value of the stock. (Because the time premium has drained - they will capture the time premium.)

The only way a call writer can lose money is if the stock goes below the price it was at when the sold the calls, minus the premium collected.
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