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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Jpres who wrote (6473)	1/16/1998 10:57:00 PM
From: Magnatizer	Respond to of 14162

Jpres The options expire tomorrow. They are worthless after that. If great news came out tonight or tomorrow morning (before noon EST) you may get called out on anticipation of a gap at the open of the next trading day (in this case Tuesday due to market being closed for Martin Luther King Jr national holiday). It would take a news item worthy of a $1+ gap to have the options exercised. The only other case would be that the option purchaser is totally irrational which, in this case, would be good for you. As long as the stock opens below $25 on Tuesday you made a good trade. In the future if you are worried about being called out of a stock you really do not want to lose you can "roll" the option out to the next month. What you do is buy back the call you sold and sell the next month call at the same strike price. This gives you another month to play with. You can continue to "roll" out the option as long as the strike price is being sold for the next month. Personally I feel that in a volitile market we have you are ok if the stock gets called because the way things are going you will be able to buy the stock back at a lower price in the near term anyway. This is just my opinion so if you feel you have a great stock and you don't want to loose it either buy back your calls or roll them out and hope for a dip. Best of luck David if you roll out tell your broker you want to do a "buy write with a net debit" and you may have to only pay one commission. What this means is you are subtracting the purchase price of the call you sold (lets call this x) from the price of the call you are selling (call this y) to create a net debit to your account of (y-x=$)