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Technology Stocks : Dell Technologies Inc.

DELL 141.91

+2.2%

1:35 PM EST

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To: freeus who wrote (81590)	11/20/1998 11:30:00 PM
From: Dr. David Gleitman	Read Replies (2) of 176387

re: Covered calls. I am also a newbie at this. If someone can clear this up for me I would appreciate it. In my case, I sold a covered call for Dec 70's and received 2.50. Now, if I decide to buy back this call, then I all I would have to do is to pay the Ask price for that (?). If that is the case, then what are puts? If, in the case of Dec 70's, if DELL goes up to 75 in the next week or so before options expiration, am I notified immediatly that I have to give up may shares at 70, or will that occur on the options expiration date. My next observation (please confirm this, if I am correct, or correct me if I am wrong) is that given a scenario where the stock valuation remains the same, the actual value of the option will gradually decrease as it approaches the expiration date. Therefore options that are more long term or futher in the future (is that the proper teminology?) will inherently have a higher valuation. Is this also true? Your comments are appreciated. Still learning... David

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