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

To: JohnM who wrote (1412)	7/10/2001 11:32:35 PM
From: Dr. Id	Read Replies (3) \| Respond to of 5205

An example of a successful repair strategy (I think...): In late April, I sold 10 AOL 50 cc's for 2.20. In May, the stock had risen to around 54 or so and I didn't want to get called away. So, I repurchased the calls at 4.20 for a loss of $2265 (including commissions). Then, the same day I sold 10 AOL Jan 62.50's for 4.20 ($4167 incl. commissions). Today, I bought them back for 1.80 ($1832). Total Gain including Commissions...about $70. However, I was able to avoid being called away, came out a tiny bit ahead, and can now play them again on an upturn (if it ever occurs again...) or hold the stock for the long term. I should mention that I have a fairly sizable long term gain on the stock, so letting it be called in May and buying it back now would have resulted in tax consequences... Dr.Id@mybrainhurts.pov