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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: Ira Player who wrote (11455)8/27/1999 11:08:00 PM
From: Casaubon  Read Replies (2) | Respond to of 14162
 
my experience has been that calls which get deep in the money prior to expiration carry no time value premium, at least in a somewhat illiquid market. Those calls essentially trade as a proxy to owning the stock. I guess this is because the market maker who buys them from you, immediately exercises the stock and sells it into the market (presumably at a profit, in some arbitrage play)