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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: miklosh who wrote (34538)	10/25/1998 4:03:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Mik, the answer is A and B. You buy back your calls, probably at a loss, and sell your stock at a profit. The net result, if the stock is deep in the money, is that you capture most of the time premium in a shorter period of time. Example. You buy a stock at $50 and sell Jan 2000 calls at 55 for $11. The stock goes to $70 and the calls are now at at $20. You have made $20 on the stock and lost $9 on the premium, giving you a net of $11 profit. And, since you did not hold for the full 15 months, your annualized rate of return is terrific. MB