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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Poet who wrote (45871)10/23/1999 10:37:00 AM
From: Jill  Read Replies (1) | Respond to of 152472
 
Poet,

From what I've been taught, there's no reason not to do what you did. I hate doing the math (and sometimes don't), but let's consider just your Q position. Take what you paid for equity, and then take the profit you got from your calls, and use that to calculate your REDUCED cost basis. I.E. if you have 10 shares for $10 each ($100) and you earned $20 profit on your most recent call buying/selling spree, you actually have 10 shares for $80, or $8 each. Then look at where Q is today and figure out your percentage gain (or let Yahoo or MSN or some portfolio do it for you).

I don't do this anymore. I used to but now I just figure, with selling puts and buying calls, I am reducing the cost of my bikini.

Jill



To: Poet who wrote (45871)10/23/1999 12:25:00 PM
From: Kayaker  Respond to of 152472
 
Poet, if your goal is to exercise an option in order to own the shares, it never makes sense to do it early. Take Jean's situation where he is considering exercising 1 Jan 2002 160 call. When he bought the call he paid for the right to purchase 100 shares for $16,000. Why pay $16,000 now for those shares when you can do it in Jan 2002? He would be giving up the use of that $16,000 for the next 2-1/3 years.


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