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

To: Dr. Id who wrote (2752)10/16/2001 1:11:16 PM
From: Mike Buckley  Read Replies (1) | Respond to of 5205
 
Id,

In the past, what seemed like a good decision in buying back calls hasn't panned out, as the stocks all dropped to levels lower than the strike in ensuing months.

In a taxable account, the stock would have to drop to the strike price less the tax rate. And you'd need to wait until that happens to buy it back to make it more advantageous. There's a big difference between the stock getting to that point and waiting until it happens to buy.

--Mike Buckley



To: Dr. Id who wrote (2752)10/16/2001 1:38:13 PM
From: Uncle Frank  Read Replies (1) | Respond to of 5205
 
>> While we won't know in the short term whether or not it was a good decision until Friday,

We could know earlier if this was a delayed roll out play designed to capitalize on the earnings run.

>> we won't know for certain unless the stock maintains it's current level.

Since that's only meaningful at the time Mike liquidates the position, we'll have to wait a decade or two before we pass judgement.

duf


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