<Why buy the call back if ....> Sure am glad I am not the only one confused by Eric's intent in his post. :))
After 3 years of regularly selling cov'd. calls and having bought them back at times, what we have concluded is that, except for very ltd. instances, if you bought the stock right, and sold the calls right, it is more advantageous to not buy the calls back.
In attempting to decipher Eric's thinking: First of all, I completely disagree about never selling cov'd. calls on ASND; to the contrary, doing so has made many of us good, consistent incomes for years; if he means you should buy them back because you'll want to keep your long position due to a likely run-up to the mid-50's, that is a possible good reason, and is up to you; but I would not lose my premium gain from the sale on a hunch; OTOH, if he thinks you should buy them back so you can sell the stock before it is at " 46 - 47," that, too, is a possible good reason, which would depend on your feelings of how the stock will move, and, obviously, your orig. basis and how much your basis has been figuratively reduced from the one or more sales of cov'd. calls.
Just a few thoughts.
I guess Eric can best explain himself. . |
