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Strategies & Market Trends : Tech Stock Options

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To: Michael Ohlendorf who wrote (58358)	2/26/1999 12:01:00 PM
From: James Joyce	Read Replies (1) of 58727

Your broker would consider it a buy and a sell at the same time so you never really hold the stock so the broker would not require a margin support on the cost of the stock. Your loss would be the following I think; + the income from the call - the comish on seling the call + the sale of the stock upon exercise - the comish on the sale of the stock - the cost of the stock to deliver it - the comish on buying the stock I think these are the amounts to consider. The option would of course disappear upon exercise so there would be no further costs on it. The net would thus be change in the value of the option (excluding comish). Again I would caution you against such trades in general. For software support you might want to look at Optionvue (www.optionvue.com). I costs about a $1000 per year to maintain but does superb analysis. James

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