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

To: Uncle Frank who wrote (595)	5/16/2001 3:51:39 PM
From: FaultLine	Read Replies (1) \| Respond to of 5205

From my reading, all this is just so much paperwork anyway for 3,4, even 5 days. I think McMillian states you do not have to purchase and supply the stock until you are notified BY MAIL, that would be two or three days later. It absolutely is not on expiration day or assignment day IMO. --fl

To: Uncle Frank who wrote (595)	5/16/2001 9:02:20 PM
From: BDR	Respond to of 5205

<< But isn't that the only way you find out>> I thought so which is why I would think buying new shares to sell in order to protect your gains in the old shares would not work. I know when I was called out early I didn't know until the next day when it showed up online. Years ago when I had shares put to me after selling puts my broker (I still had one then) and I didn't find out until the shares were already mine.

To: Uncle Frank who wrote (595)	5/17/2001 8:24:48 PM
From: StockHawk	Respond to of 5205

isn't that the only way you find out - after the market closes?... StockHawk - I think you should call your broker immediately and find out how they handle it. Thanks for the work assignment, boss<g>. OK, here is the scoop. My initial question was not just theoretical. I got a phone call at 9:20am (before the open) from Dreyfus. I was told I had a sale of stock due to a partial exercise of a May option that was just $3 in the money. I spoke with someone else who said assignment was done randomly. I checked my account on-line and the stock sale was showing up as activity for the day. Next I checked my Waterhouse account where I had similar covered calls, and again a partial assignment was showing. The way Waterhouse sets up their screen, when you look at your portfolio you see the previous day's quantity and the current day's quantity, and the current day was showing less than the previous day. However the trade had not yet shown up when I clicked on the orders page. I was not happy about the sales and didn't think there was anything I could do and then I got the idea of buying new shares. I decided to place an order to buy back the exact number of shares that had been sold. I also covered the remaining options. When that was done I called Waterhouse and told them that I had received an options assignment, and I did not want them to use the stock in my account to settle the order. I instead wanted them to use the new shares I just bought. It took some time but they agreed to do it and they gave me a file number to evidence the conversation. It took more work to get Dreyfus to do the same thing, but since I was not taking "no" for an answer I eventually got someone who both understood what I was talking about and said they could do it. I figured that since a trade takes three days to settle I should have that time to get any shares I want to fill the options assignment. The Dreyfus transaction was more difficult because although the options had been excercised, the margin requirement for those options had not been taken off the account (it was to be done that night). Also, while the stock sale showed up on my account the cash was not released to me. Thus I needed new cash to buy back the stock and I had insufficient margin to do so. It took some talking to first get authorization to make the trade and then do the dance of switching shares for the assignment. But the bottom line appears to be that it can be done. StockHawk