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To: aniela who wrote (47606)	4/8/2003 12:11:34 AM
From: BWAC	Read Replies (1) \| Respond to of 53068

<Say the stock hits the strike price plus the premium (more or less). how likely I am to be called at that point versus them letting my shares run up all the way till the expirartion date > Depends. 99 times out of 100, you won't be exercised until expiration. The amount of time premium could be a determining factor though. As long as "some" time premium exists, the option would normally just be sold by the buyer (ie not exercised against your stock). If the option buyer really wanted the stock he/she could just buy it after capturing the time premium still left in the option. A stock that has moved far away (up) from the Call strike price could actually move so far that little or no time premium exists for the Call. Even though it has months til expiration. $10 Strike Covered Call, $25 current Stock Price. A Leap $10 strike Call Option might only be valued at $15.20 This is where you will get the opiton exercised against you. The sooner the better too. Assuming you sold it at a hefty time premium. Any early exercise ACCELERATES your effective % return. Because it completes the transaction. Completes your obligation.

To: aniela who wrote (47606)	4/8/2003 12:22:12 AM
From: BWAC	Read Replies (1) \| Respond to of 53068

<Tying up a lot of capital, nooooo ?> Not really. You can always close the option out. In the case of a covered call and a rising stock price, I'd say you should almost always be able to do so at a profit. Profit as in collecting some from the time premium sold. The stock will move more than the option by a certain ratio. Example: Today: 1000 XYZ bought at $10. Sold Jan 2004 $10 strike Leap for $3.00 Market ramps overnight on who knows what fantasy.... Tomorrow: XYZ is at $12. Jan 2005 $10 Leap is now $4.25. Action: Sell stock. Buy Leap Back. Net $12 less $4.25 = $7.85 Gain: $7.85 net proceeds less ($10-$3)net cost = .85 cents per share.