Hi, Freeus, Consider selling calls to cover the margin call.
Example: 1,000 shares margined at $125
Buyer and margin dept each put up $62,500.
Dell drops to $100, if you sell it you lose $25,000 forever.
Instead: sell 2001 leaps, [120 strike] for about $35,000.
This will keep the margin guy happy and prevent a loss.
I sold ten $130 puts, 2001 leaps @ $37.50
Today sold the 130 calls @ $35.00
Now have $72.50 in premiums to apply to $105 shares, net cost 32.50.
If it's called away I'll get $130 = 400% of net cost.
Breakdown: stock cost $105 less 72.50 = $32.50. Call strike = $130.00
Of course, the puts can be exercised for $130 in the future.
The new shares will cost me 130 less 72.50 = 57.50.
Then I can sell more options, get more premium$, end up with free stock.
If you need additional info let me know. OK, Freeus?
Sorry to see you sad.
Don Martini |
