Date: Fri, 13 Feb 2004 09:59:11 -0600 From: RickB <rberry883@comcast.net> To: Earl Smith <t_esmith@hotmail.com> Cc: freebsd-ports@freebsd.org Subject: Re: Writing covered calls Message-ID: <402CF44F.7010607@comcast.net> In-Reply-To: <BAY8-F33WeUv8IuXGF40001660f@hotmail.com> References: <BAY8-F33WeUv8IuXGF40001660f@hotmail.com>
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Earl Smith wrote: > I found a stock selling for 42.76 - this stock looks to be on the > rise. The April 42.50 call last sold for 2.55. If I buy the stock > for 4276 and sell the option for 255, my cost basis in the stock is > 4021. If the option is exercised, it seems to me that I have 229 > minus commissions. I think I recognize some of the potential > shortcomings for this strategy - the stock might not rise enough for > the option to be exercised, or the stock might fall, in which case I > wouldn't be called; the stock might rise enough for me to have made > more money buying the stock and selling it at a profit; I might not be > able to find a buyer for the option. > > Are there some other pitfalls that I don't see? > > Thanks, > Earl Smith > t_esmith@hotmail.com > > _________________________________________________________________ > Create your own personal Web page with the info you use most, at My > MSN. http://click.atdmt.com/AVE/go/onm00200364ave/direct/01/ > > _______________________________________________ > freebsd-ports@freebsd.org mailing list > http://lists.freebsd.org/mailman/listinfo/freebsd-ports > To unsubscribe, send any mail to "freebsd-ports-unsubscribe@freebsd.org" > Why don't you give us the name of the stock and we'll investigate it for you. We wouldn't want you to make a bad investment. rberry88
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