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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: Jpres who wrote (6470)1/16/1998 10:43:00 PM
From: Hunt  Read Replies (1) of 14162
 
Jpres,

If I might intrude to answer. If you sold the January 25 call and the stock closed today at 24, you can pretty safely bet that you will keep your stock. The folks who bought your options have no incentive to buy the stock from you at 25 when they can buy it at the market price of 24. That being said, there are several exceptions, 1) if during today the price floated above 25 and they decided to excircise those options and later the price dropped down to 24. and 2) They are completely irrational and they want to "force" the option seller(you) to give up his shares because they "spent that good money for the options".. Number 1 has happen to me twice, I received notice that the options were exercised before noon on expiration day.(I just repurchased the shares at a lower price. Number 2, I have only heard rumors and rumors of rumors that it has happened to people. 99.999% chance you will keep your shares. For a different senario, I once sold the 7.5 calls on some stock I owned, it closed about 8.25 as I remember it, and it was not called away. Nothing like .75 in my pocket for some one elses's mistake. Kind of like finding a 10 dollar bill on the side walk.
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