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

To: FaultLine who wrote (465)	5/7/2001 7:55:31 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 5205

Another good reason to have some freedom-of-action-cash around. That being the case, tying up the cash should be factored into the equation that determines the returns one gains when writing CCs. I don't remember seeing anyone accounting for the cash earning money market rates that could instead be deployed in other investments. Of course, considering what happened in the last fifteen months, perhaps the best reason to write covered calles was because it forced the prudent CC writer to keep a certain amount of cash under the mattress. --Mike Buckley

To: FaultLine who wrote (465)	5/7/2001 8:48:43 PM
From: BDR	Respond to of 5205

Using options to protect a short term gain until it can be considered long term for capital gains tax purposes is something the IRS has said is a no-no, but the rules aren't exactly crystal clear. Just how deep is very deep? "Substantial reduction of risk of loss" seems to be the principal at work. Now you can use options to carry a gain from one tax year to another, I believe, but it won't change the holding period. Message 15226461

To: FaultLine who wrote (465)	5/7/2001 11:29:53 PM
From: T L Comiskey	Read Replies (1) \| Respond to of 5205

FL...."Also, did you know that you can buy and deliver "new" stock to satisfy an assignment rather than cough up the original low basis securities with high capital gains problems on which you originally wrote the call? It is true. Another good reason to have some freedom-of-action-cash around. --fl " Question...as options are 'called' on the 3rd saturday.........I assume One NEEDS to buy and deliver 'new' stock...on the friday before the close...and not later Correct..??? Thx Tim