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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Elmer who wrote (117029)6/21/2000 9:37:00 PM
From: Eric K.  Read Replies (2) | Respond to of 1570834
 
Elmer--

Could you explain the "nice tax advantages" of writing covered calls? Aren't your premiums short-term capital gains? Moreover, I don't think you have had your long-position for over a year, so aren't you subject to your long position being called away and becoming a short-term gain as well? Given your supposedly massive wealth position, doesn't your clever strategy make all your AMD gains taxable at 39.6%, plus 9.3% extra if you are living in California, or an equivalently tax-happy state?

Isn't holding stock or leaps for over a year, and getting taxed at 20% when you sell, the most tax friendly (and arguably return friendly) strategy?

-Eric



To: Elmer who wrote (117029)6/22/2000 11:11:00 AM
From: EricRR  Read Replies (1) | Respond to of 1570834
 
Actually Elmer I think your strategy is a very prudent one. My only gripe is that you've been telling the rest of us "zealots" that you are an AMD long and that you make money writing puts, and buying shares with the premiums, but the covered calls part I didn't remember you mentioning before.

BTW, how far from spot do you usually set the strike prices of your puts and long term calls?


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