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

To: Jon Khymn who wrote (4236)4/19/2004 8:41:49 AM
From: robert b furman  Read Replies (1) | Respond to of 5205
 
HI all on this thread,

I've often lurked here for quite some time.

I sell puts in the hope of buying the underlyinf stock at a below market price.

I've been given some money,bought some stock at a good price and bought some stock at an above market price.

In all I'm happy with the overall "little help" options have given to me.

I have a question ,that is due to a lack of experience.

Friday's close went out on a stock I own called Cohu.

It has almost no option activity,but it closed right on the exercise price @ 17.50.

What happens to those cal or put holders?

I'm told there is an allocation,but I'm noyt sure as to the mechanics of the settlement.

Thanks in advance for any help/clarification.

I do enjoy the knowledge shared over this thread.

Bob



To: Jon Khymn who wrote (4236)4/19/2004 6:20:25 PM
From: alanrs  Respond to of 5205
 
Yes, I have, but the purpose of the post was not to toot my own horn. I was trying to give a fairly typical example of how I go about selling calls and my actual results. I don't push it. Some months QCOM or CREE or NTAP or now SNDK carry more of the load. I don't sell every call I could every month. I look at it more as waiting until I think I see money laying on the ground and then going over and picking it up.

ARS



To: Jon Khymn who wrote (4236)4/21/2004 10:34:33 PM
From: Dominick  Read Replies (1) | Respond to of 5205
 
Looks like your calls have $0.25 remaining and the stock is down about $24.

If you're having 2nd thoughts about RMBS, one strategy would be If you bought the stock at $28 and wrote calls for $1.50,(0.25 buy back), your basis is $26.50. You could sell the Aug 25's for $3.00 which will give you a new basis of $23.50.

If called, your percentage return would be 25/23.50= 6.38%.

dom


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