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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: arthur pritchard who wrote (89812)	1/18/1999 10:45:00 PM
From: musea	Respond to of 176387

Arthur, Would you not be further ahead doing what Apratim is saying---to sell the leap call when the time portion of the premium runs out, and just pay the tax. Undoubtedly, he has proof that in all likelihood, this is more profitable. I think that it might be. You'd probably have to time your sale for before the time premium runs out or I think you'd be better off buying the discounted shares. One idea is to combine the two. Especially if you are not able to follow the market closely at all times. Basically, you buy a number of LEAP calls and decide to sell some of them when the price gets to the point where you've covered your costs after taxes and commissions. Then if all goes well you get a free ride to discounted shares at expiry. This can be done with a limit sell order to your broker so you don't need to watch the market. Obviously, you can't expect to do this all the time with all stocks, but it has worked in the past with DELL LEAP calls. This is a pretty conservative and unimaginative approach, I realize. But at this point, I'd rather have the shares than the income, and I'd rather buy the shares at a discount. Also, there are lots of times when I can't watch the market closely so I need to do things that work automatically, like limit orders. Most of the time I'm even more conservative than this, and just buy the dips. -musea