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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study!
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To: robert read who wrote (10771)5/13/1999 4:44:00 PM
From: VincentTH  Read Replies (1) of 14162
 
Robert,

I totally agree with Herm, but would like to add my 2 cents worth:

For the same reason football coaches do not want to take points off a made field goal for a first down, just keep the premies in your pocket. However, in addition to the 2 choices that Herm stated

1. Roll up strike
2. Let it be called out

I would like to add:

3. Roll forward (future months) keeping the same strike, provided of course that the strike price is offered for the stock. This 3rd option is actually preferable if

1. Your underlaying is a LEAP or a call option that still has time premium in it.
2. Your stock has appreciated and you don't want to be called out which triggers a long term or short term tax.

Hope this helps,

//V
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