To: still learning who wrote (3138 ) 6/24/1999 12:56:00 AM From: michael r potter Read Replies (1) | Respond to
SL and Robert, thank you for your responses. Lots of good information and educated guesses in all of them. Forgot about USI. The $50 ICGE hypothetical was purposely thrown out as a starting point to be on the high side, to make the point conservatively. I'd be surprised if it settled in that high also. If there is logic to the fair value analysis, and the market is not in a mood to take SFE to vast premiums over NAV [in July when ICGE and probably USI will be included], when I looked at the Aug. calls for a covered sale early this morning, premiums looked like money in the bank. Premiums on the Aug 85s and $80s were still very good. Didn't sell them as I have an emotional hang-up on selling calls on SFE that seems to overtake logic. It would have to be on the long term holding-low cost basis stock, and would buy in before letting them call it. Logic ruled the day on selling the trading stock, and emotion won out by not selling calls on long term. Sure can't envision a likely scenario that would cause the Aug. 85s to end up in the money. OT FWIW, you may recall the sale around late May of the Tellab $135 calls when the stock was $118. Well, the market and Tellabs sold off, and 4 days before expiration TLAB was so far out of the money that there was no bid, and 1/4 ask. Tellabs screamed last week right into the final hour of expiration and traded in the money. Ended up buying them back 5 minutes before the close. Ended up paying $1 1/2 for calls sold at $2 3/4. They actually went as high as $3 1/8 that final hour. It was nick and tuck until a late fade. Was praying the broker wouldn't go down those last 10 minutes and not allow a buyback. If called away it would have been very expensive tax wise. [figures not adjusted for recent split]. If you want a stock to go up, just sell out of the money covered calls on it. <g> Maybe I should sell the Compucom 5s!. Mike
