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

To: im a survivor who wrote (4839)	3/13/2007 2:07:04 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 5205

>> have all of my long shares covered with the April 42.50's. >> any strategy that will enable me to not have to buy back my calls, but not get called away if qcom is above 42.50... That would be quite a trick. Let me know if you find a solution, as I'm covered with the April 40 strike. One approach might be rolling your calls up and out. That means "trading" your April 42.50s for something like the July 50s. At the current prices, the trade would cost your around $.40/share, but the delta will come down as we get closer to the expiration of the April calls. duf

To: im a survivor who wrote (4839)	3/13/2007 8:44:39 PM
From: Jerome	Read Replies (1) \| Respond to of 5205

>>> dont really want to buy the calls back so am looking at any strategy that will enable me to not have to buy back my calls, but not get called away if qcom is above 42.50.<<< There is no other way than doing a buy back. Option writing is about choices and chances and consequences. Over the years I have written many options on stocks at the 25 strike, only to see them rise to 35+ by expiration. Tough!! Example...take Intel tomorrow you buy a 1000 shares at 19.25 and write the April 20's for whatever you can get. You get called out at 20 but now the stock is at 22. Use the 20,000 in proceeds to buy 900 shares of INTC and then write a covered call at the next highest strike for the following month. My general rule is to buy an option back only if the repurchase price is 1/4 th or less than the premium originally received. JMO...Jerome