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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: stockycd who wrote (10789)	5/14/1999 8:04:00 AM
From: Casaubon	Read Replies (2) \| Respond to of 14162

You never get assigned until the expiration date of the option. After the expiration date, if you were assigned, you no longer own the stock that was covered by the call, but instead have the money due for the strike of the option. I hope that helps.

To: stockycd who wrote (10789)	5/14/1999 8:41:00 AM
From: Herm	Respond to of 14162

When you get assigned Chris, you have to honor the contract terms and surrender the stock at the strike price you sold. So, if you write a CC for a $45 strike and the stock is at $50 you may be on the short end of the stick. The CC premies do help, but, a CC buyer will only exercise when it is to their advantage price wise and they want to own the stock itself. Usually, if the stock gaps up and there is plenty of remaining time left you will hear about more calls being exercised. I sometimes buy the long calls first and then buy the stock itself later by exercising my calls. Reason? I don't have the money or don't want to use my margin at the time to buy that stock outright. So, I lay the ground work by owning the long sideshow calls. As the value of the calls increase that will help increase the equity vs. liabilities ratio in your portfolio which determines your floating % of margin you have to use. Of course, you should not use margin when you first start off in this game. Get some experience under your belt before you borrow money. Margin a sharp two edge sword!