Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: Richard James who wrote (643)	11/12/1999 12:09:00 AM
From: cloudless	Read Replies (1) \| Respond to of 3770

I'm in the same situation on some BellSouth covered calls that I wrote. I also just ended up buying back some Aware covered calls at a loss because the stock had already hit my target and the calls were Jan 40's. Good Luck on the Tyco calls. We'll see what tomorrow brings. Cloudless

To: Richard James who wrote (643)	11/12/1999 1:12:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 3770

Richard, What you say makes little sense unless you got a bad quote on the price of the call or the calls were mispriced. When the price of the stock is greater than the striking price of the call the difference is the intrinsic value of the call. The difference between the price of the call and the intrinsic value of the call is the time value of the option. What you seem to be describing is a call with a negative time value. If you provide some exact numbers on the price of TYC when you sold the call and the price you obtained for the call perhaps and the striking price and expiration of the call I can cut through the confusion. You always achieve maximum profit on your covered call position when, at expiry, the price of the stock is equal to or greater than the striking price and will equal the striking price plus the premium received for the call less the cost of the stock. Your break-even point is the price of the stock when you sold the call less the premium you received for the call. But for intermediate time frames the implied volatility can vary depending on investors' views of the underlying issue. TTFN, CTC