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Non-Tech : Complaints About Schwab -- Ignore unavailable to you. Want to Upgrade?

To: NetBuyer who wrote (30)	1/14/1999 12:54:00 PM
From: cirrus	Respond to of 196

I'm not sure I follow this. When splits or mergers take place, options values are adjusted to reflect the values of the underlying securities. Option holders don't get screwed. Since you sold a covered call, you accepted money up front and gave up the right to any further appreciation in the stock. If you sold 1 covered call contract (on 100 shares of MCI)and MCI merged into WCOM, and MCI stock rose, that's all you're going to get - the strike price equiv of 100 MCI shares. Your profit is the call premium you received + or - the amount your call was in or out of the money at the time you wrote it. If you were looking for more because of the merger - well, I don't know what to tell you. As for Schwab, you shouldn't be going over anything with them at length. Schwab is a discount broker. If you want an education, you need a full service broker. I'm not trying to be sarcastic, but discount broker's are just that - they execute - nothing more. I trade options, and if I want to trade an option on the first day following a split, before Schwab accounts are updated, I need to call Schwab with all my info because once in a while I get a rep who may not be familiar with what's happening and how to handle it. If you really feel wronged, I suggest you look up the CBOE WWW site. There is an 800# somewhere where you can call and speak to a CBOE rep regarding options questions. They can usually give you a bit more help than a broker. If you can't find it, e-mail me and I'll try to find it in my records. Regards: >>>>>The Schwab rep couldn't figure it out. He said he'd call me back, which he did a while later. Sadly for me, what he figured out was that these options "represented" 124 WCOM shares, but they only pay you for 100 shares! So instead of getting $7440 per contract, I'm getting $6000. Effectively, my sell price for the WCOM shares has been reduced from 60 to 48.34!<<<<