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To: Walt Corey who wrote (41768)	5/13/1998 11:43:00 AM
From: jbn3	Respond to of 176387

re On my Aug 95's the strike price was $95, the option cost was $10+. So one could not exersize the option really until the price exceeded $105. Walt, In case no one else has pointed out the typo, the above statement is not true as written. The purchaser of your call option can exercise at any time up until the expiration date. Naturally, he would not normally do so, if the stock were trading below the strike price, because he could buy the stock more cheaply on the open market without exercising. However, if the stock is > $95 on expiration, you will very likely be called out, as the buyer does 'save' $$ (market price less 95 strike) by doing so, as opposed to just writing off the $10 premium he paid. Therefore, if the stock price is above the strike as we approach expiration, you might want to close your position by buying the calls back. This would preserve your long-term cap gains equity position, while affording you some short term profit. You could then roll your position out if you wished. Regards, 3.

To: Walt Corey who wrote (41768)	5/13/1998 11:43:00 AM
From: Kayaker	Respond to of 176387

<<On my Aug 95's the strike price was $95, the option cost was $10+. So one could not exersize the option really until the price exceeded $105.>> At the time you sold them, the calls may have cost someone $10+, but most folks would have purchased them in the past months for far less. So, they may exercise at a lot less than $105. Also, here's a quote from "Options for the Stock Investor" by James Bittman, staff instructor at CBOE: "Myth #2: 'Covered writing is a good strategy, because most options expire worthless' This misconception is a commonly held belief, but it is illogical....The fact is, most options do not expire worthless....The CBOE statistics indicate that approximately 35% of option contracts expire worthless."