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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: WBendus who wrote (6587)3/26/1998 6:31:00 PM
From: Snowshoe  Respond to of 19080
 
>>Selling covered calls is a taxable event, that is you must report it as income on your taxes. Furthermore, in the event that your calls get exercised, there will likely be a very substantial tax burden placed on the longterm capital gains.<<

Very good point. But covered call writing can also be done in an IRA, which eliminates the tax consequences. I did this with ORCL before the big drop, and bought back when the stock bottomed out. Now that the stock has recovered, I may write them again if we get to 40 or so.



To: WBendus who wrote (6587)3/26/1998 6:45:00 PM
From: AnnieK  Respond to of 19080
 
Wayde,
Thanks for your input. Believe me, I'm painfully aware of the tax considerations for investment decisions, having an average cost basis in ORCL of $3. I sold some of my holdings last year and am facing what can only be described as an obscene Federal & state tax bill next month. That's why I'm not so sure I want to risk being called out. You bring up good points - I'm looking at this strategy very carefully before I dive in.

AnnieK


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