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Strategies & Market Trends : Strictly Buy and Sell Set Ups -- Ignore unavailable to you. Want to Upgrade?


To: profile_14 who wrote (3074)4/2/2005 2:54:23 AM
From: chowder  Read Replies (1) | Respond to of 13449
 
>>> You can box yourself by selling a deep in the money call against your stock. In other words, hold the stock, sell the call, collect the divvy and cover the call for 12 bucks less and make 12 on the divvy and 12 on the call. <<<

Profile,

I know it's too late to do anything now but, I do have a question for you regarding ATPL.

I don't know very much about options but I would like to ask a question anyway. Others might benefit as well as some have shown an interest in options.

If I were to buy a call against the stock, knowing the cash dividend were coming, what month & expiry option would be best? And, knowing the price is going to drop by $12.50 per share, what would prevent the person who was holding the call from exercising (is that the right word) early?

stockcharts.com[h,a]daclyiay[d20050101,20050401][pb50!b20!f][vc60][iut!La12,26,9!Lc20]&pref=G

Thanks.

dabum