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Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: Debt Free who wrote (4674)	10/31/2010 1:51:09 PM
From: Gottfried	Respond to of 5891

in addition to selling the straddle, I'd also consider buying the $16 put at 8 cents for protection.

To: Debt Free who wrote (4674)	10/31/2010 5:18:32 PM
From: wilywilly	Read Replies (1) \| Respond to of 5891

Change your calculation to account for: Nov 3 - stock is called away at $17 on an early assignment, when it is about to go ex-div while you're short the ITM call.

To: Debt Free who wrote (4674)	10/31/2010 6:08:40 PM
From: dealmakr	Read Replies (1) \| Respond to of 5891

You have a good chance of that call being exercised for a dividend collar and with earnings on 11/02 before ex dividend date, you also have headline risk involved. Downside protection as a result of adding both of the call and put prem written and not counting on the div as the stock could be called using only time value and not intrinsic value of the in the money call is .12 on the call side and .28 on the put side for a total of .40. If you like the stock for a write maybe look at the Dec series calls as there is less chance of the underlying being called away and will give you a better chance of collecting the dividend. dealmakr