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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Hugh A. McWhorter who wrote (7839)	2/19/1998 7:49:00 PM
From: Carl Wysocki	Read Replies (2) \| Respond to of 64865

Hugh, you had me worried with your explanation of the tax impacts, so I double checked McMillan's "Options as a Strategic Investment" just to be sure. Only the purchaser of a LEAP may qualify for long term gains, not the seller, if the holding period is met. Option premium received is added to the sales proceeds of the stock when the stock is called. They are only 2 separate transactions if the option expires. (Sounds like you have Quicken--this is how I have to account for my option sales to keep the accounting straight). Wash sales don't apply to rolling out options. It's even possible to get a short term loss on the option cover, and convert the rolled premium to a long term gain, if the stock meets the holding period requirement and the option is exercised. Seems like one of the few tax bennies available anymore. Too bad Sun doesn't have a high implied volatility to pump up the premium some. Back in the fall I was considering writing some Jan 99 60's for close to 8 Bucks, but never got around to it. If figured 68 was more than a fair price by then if called. Carl