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To: SHERRELL B. who wrote (1825)1/27/2000 10:26:00 PM
From: edamo  Respond to of 8096
 
sr...you can write a covered call against any long call you own. just write a strike higher then your strike plus the premium you paid. if your contract is called, you exercise the lower contract, deliver the stock to the higher strike contract, keep the spread and the premium.

e.g. buy april 100 call for 10
write april 120 call for 3
stock at 130 in april
you exercise 100 deliver at 120
-10/+3/-100/+120=+13 or 120-100=20-10+3=13