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To: Len who wrote (9252)3/25/2000 6:16:00 PM
From: kokomama  Read Replies (1) | Respond to of 35685
 
Rolling up and out with little cash...
I'm toying with ideas on how to do this successfully, too.
In one IRA account, I have 1000 shares of Q. A few weeks ago, I sold 10 April 150 calls at about 6. Kept the $6,000 in my account. So, now I'm wondering if, at expiration day, Q is, say, in the 160-180 range. Use the $6,000 to buy back as many of the calls as I can. That frees up some shares on which to roll up and forward. Write May contracts on the freed-up shares at a strike price adequate to give me enough cash to buy back the rest of the April calls. Then I don't risk getting exercised.

This is just my second month of writing calls, so I'm a novice at this.

Any thoughts, anyone?

kokomama



To: Len who wrote (9252)3/25/2000 7:15:00 PM
From: Voltaire  Respond to of 35685
 
Hi Len,

in an IRA you may have to sell the equity unless you have the hard cash in the account. This is no big deal because there is no taxes but it may be technical that one sell if there is no cash available. You simply do a buy to close then sell the stock or vice versa and then purchase the stock back if you wish.

Sounds like you have about got it.

V


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