>>When will all of you cover if it keeps going up?<<
Aloha,
Your logic for shorting YHOO makes perfect sense to me. I'm currently short Aug 185 YHOO calls so my potential timing for covering is a little more vague than yours. I shorted two calls and collected a premium of $26, so I would start losing money at a stock price of $211. I would probably cover the calls at about that price, and take a modest loss, as the "time value "should be much lower (closer to Aug. options expiration), Then I would cover whatever loss I had by rolling over and shorting Oct. calls. In that scenario, I would probably be able to short a 240 or 250 Oct call (they're offering almost $15 premium for the Oct 220 right now). If the stock price is below 185 (or post-split 92.5) @ August options expiration, then I'll keep my fat premiums. In any case, I think the current stock price is the result of a massive "short squeeze", most probably due to hedge fund activity, not naive dentists, widows and orphans as the mass media would have you believe. This "short squeeze", currently dubbed "internet mania", will eventually resolve itself, and shorts should be amply rewarded. That said, you should be ready for what might be a wild ride. BTW, MSFT and XCIT both beat First Call numbers, and both were down in after-hours trading. Also, the intelligence of the dialogue of the YHOO shorts vs. YHOO longs is very encouraging...
Aloha and happy investing,
Da Zipstah
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