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

To: FaultLine who wrote (518)	5/10/2001 4:44:27 PM
From: Uncle Frank	Respond to of 5205

>> Is it true that you make this statement in the context where you know your basis is less than the strike... No. I ignore the original cost basis when I examine the effectiveness of writing the call. Now that I think about it I would be more concerned about being called if I had a large profit in a position, since tax liability would overwhelm the short term gain and I would lose my long term holding period when I bought the shares back. But this may be unique to me, since I am only writing against core positions that I intend to maintain. In my ira, I am not troubled by being called out no matter if I am ahead or behind in the position. uf