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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: cfoe who wrote (265)	4/25/2001 8:57:32 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> You wrote (on the Buying Range thread, I think) that you would not buy back certain covered calls on QCOM until they were at $.80. Since there are nitpickers in the area, I'll provide the exact quote: I wrote May 65 strike covered calls for $5 at the bell when the underlying was pushing 63. Their value will probably drop tomorrow, but unless they are very low (<.50), I won't buy them back. I'll just leave them in play until expiry. >> Is there a price point at which I ought to at least consider buying them back? McMillan might not like this approach, but here's the way I figure it. I'm a land lord and I have just rented out my property. A tenant pre-paid $5 for a 4 1/2 week stay at my beautiful house, but due to dirt that got tracked on the carpet, he wants out after one night, and he'll leave if I refund 10 cents on the dollar. I still have over 4 weeks left, so maybe I'll clean the place up and try to rent it again. Seriously, it's probably best to let the current options expire worthless. But I enjoy this game and am pretty aggressive about milking cash out of my holdings. It can be dangerous, though. Last month, it backfired on me. duf