by LeAnne Perkowski | Oct 19, 2018 | Melinda's blog
From Melinda May, CPA | Featherstone Down Market Carl’s shares of XYZ might plummet because of company news or a broad stock retreat. The $180 in cash from selling the call would be scant consolation if his $10,000 outlay drops to $9,500 or $9,000 or lower. Carl could...
by LeAnne Perkowski | Oct 18, 2018 | Melinda's blog
From Melinda May, CPA | Featherstone Up Market In another scenario, XYZ shares break above the $55 exercise price, and the call options are exercised. As this is a “covered” call, Carl can fulfill his obligation under the option contract by delivering the 200 shares...
by LeAnne Perkowski | Oct 17, 2018 | Melinda's blog
From Melinda May, CPA | Featherstone Flat Market Say that XYZ shares bounce around $50 for three months. They never top $55, so it never pays for the owner of the option to buy Carl’s shares. The call option expires unexercised. Here, Carl’s $180 income from selling...
by LeAnne Perkowski | Oct 16, 2018 | Melinda's blog
From Melinda May, CPA | Featherstone Selling the Upside A covered call strategy can begin with the purchase of a stock that seems appealing. Example: In October, Carl Wagner buys 200 shares of XYZ Corp., trading at $50, for $10,000. He instructs his adviser to sell...
by LeAnne Perkowski | Oct 15, 2018 | Melinda's blog
From Melinda May, CPA | Featherstone Up one month, down the next. The stock market this year has offered lots of excitement. As of this writing, broad market indexes have provided little sustenance for bulls or bears, with results not far from early 2018. One strategy...
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