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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Morgan Drake who wrote (11071)	6/18/1999 8:49:00 AM
From: Herm	Respond to of 14162

Hi Morgan, Congratulations on your major KAHUNA! You have them by the short hairs in my opinion. Bottom line! Your 200 QCOM July 60s are now worth $6,000 x 200 = $1,200,000 if you cashed them out outright. Since, you long calls are same as cash value and NOT margin, you have the necessary down stroke in equity to exercise even before the equity in the stock is taken into consideration! "Free riding" claim is bull! I have been hit with free riding when I purchased stock on MARGIN and sold it in less than three days at a profit without adding any funds. I argued that when I was extended margin the stock I purchased was technically a cash deal and that I don't need to wait three days to sell that stock. They gave me a hard time so I wrote some CCs to bring in the cash for them. They still hit me with free riding which amounted to 3 months penalty of no three day grace for payment of stock. By the way, they admitted that I had a good point after I was hit with free riding. Hey, if that is the worse they will do in your case, the hell with the penalty and exercise that 2+ million dollars sitting there. You can then write some covered calls and tell them to stick-it while you gleem with a smile for three months! Double check the penalty! Note, it looks like a market top for QCOM! Cash it out! Have you considered exercising in lumps of 50 or 100 contracts between now and the July expiration? iqc.com Thanks for your situation. Keep us posted on the outcome! This one we got to hear!!!!

To: Morgan Drake who wrote (11071)	6/18/1999 3:33:00 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 14162

Any suggestions for tomorrow, thread? We should all have problems like yours Morgan. Not bad when a broker hassling you turns into an additional $100K profit. Anyway, if you haven't already thought of this, you can force them to do the following transactions in sequence. (I assume your cash is available immediately after selling stock). QCOM now at 126+. I used 125 per share to give a little room to cover commissions. All you need is $6000 plus commissions to force their hand. If you have anything else in the account you can sell to raise this cash you are all set Exercise # Cont. Cost Cash in stock Buying power 1 6000 12500 25000 4 24000 50000 100000 16 96000 200000 400000 66 396000 825000 1650000 113 678000 1412500 200 1200000 2500000 Dan