Calls and Puts for Income 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.

Strategies & Market Trends : Calls and Puts for Income

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jim P. who wrote (5737)	7/29/2013 7:18:09 AM
From: dealmakr	Read Replies (1) of 5891

"I am short a large number of APL August 39 calls. The stock is at $39.27 and the calls are at .65 bid and .80 ask. The stock trades ex dividend on August 5 for a .62 dividend and the earnings announcement is after market close on the 5th with conference call on the 6th. " Hi Jim, This is one type of trade that you have to be very careful in where the price of the stock is trading on 08/02. With the stock going ex dividend on 08/05 which is a Monday, you have weekend risk involved also. The possibility does exist for someone to try and capture that dividend and do an early exercise against you if the stock is near the strike price of 39 on 08/02 close. Just a possibility, but with the large amount of short calls that you have open, it could be a costly experience if the stock is exercised and you have to come up with the dough to cover the exercise. Just my .02 Good Trading dealmakr

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next