SI
SI
discoversearch

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 ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Delfino R Zavala who wrote (5792)9/3/2013 10:43:56 PM
From: TheNoBoB1 Recommendation

Recommended By
Jim P.

  Read Replies (1) of 5891
 
Can you comment on the risk of a company getting bought out at a much higher price than your naked call?
The message you responded to may not have been as clear as it should have been -- which is why I don't write for a living :)

I virtually never sell naked calls, even on the most promising chart patterns. If the call has no stock under it, I just about always use a spread, buying a call above the short strike at a level where I'm comfortable with the risk profile. Yes, that costs a bit of premium, but IMHO it's worth the expense. Like you, I want an exact answer to the "But what if it keeps going up??" question.

As the other participants have pointed out here, company selection plays a role too, but there's been some big buyouts over the years, and I prefer to keep my guts on the inside, and forgo a bit of the glory <G>
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News