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Jim,I like it. I understand battle plans well..FYI, I have another 10K in my trading account that I wish to trade or have open for an extrodinary event...say a buyout. Ha! Saw your comments but who knows.West
westhaving otm leaped covered calls on an actual buyout stock is a gift when it happens as long as the takeover price isnt huge.lets say you had sold jan $15 2012 leaps on gnw for $2.25..an effective $17.25 selling priceIF gnw had an actual all cash buyout with a $16.25 price, a $3 premium to today...what would happen is gnw would soar to $16.25..the done deal price.your sold jan $15 calls would drop to $1.25... thats the maximum they would be worth at expiry to the OWNER of the call.your long shares increase $3 and the sold shorted calls drop $1you would make a $4 profit without having to wait 17 months by simply closing the positions WHEN you chose to do so for tax purposes, 2010, 2011 or 2012.jim
Jim,So you think doing a few leaps as suggsted on some of my free shares would be prudent in any event?West