Morning Linda, All I'm saying is that it sounds like you can eliminate the BMY tax liability with your losses, but then again, you'd probably be able to defer that strategy till next year anyway. Who knows what will happen? We'll continue to hold alot of BMY without considering
a sale. As for what I said about the derivative, this involves options' strategies. You could "collar" your gain in BMY without any cost, and your downside would be protected while the upside would be limited. On 100 shares of BMY, you could write (sell) 1 near term 95 or 100 covered call while at the same time, buy 1 same term 85 put. If the stock stays within the collar (between 85 and 100), you keep the stock
and possibly rollover the strategy when the options expire. If the stock moves above or below the collar on or before expiration,
you're protected on the downside (the put gives you the right to sell BMY at 85), as well as taken out on the upside
(the call buyer has the right to buy your stock at 100). The proceeds from selling the call will probably cover the
cost of the put, so the total cost is minimal.
You could also just straight out sell 100 BMY and buy 1 call option to achieve the same leverage, but this is riskier, since if BMY declines, you could lose the cost of the call. However, about 95%
of your principal would be converted to cash while approx. 5% would go to purchase of the in the money call.
You're right about HEB. It all depends on what's going to happen and who knows.
I guess you'll just have to weigh its prospects against others you have in position. |
