If the stock closes at 49 or above on May 20 I'll lose the stock. I'll use the proceeds from the stock sell to diversify out of Abt stock or exercise Abt options at 33.23 that were granted to me by the company. Ideally, the stock will close at less than 49, I'll keep the stock and the call premium and repeat the process using August calls. I just feel this stock has a limited upside.
how about the risk for holding stocks till may. premium from $49 strike gives you only a very little downside protection. how about selling in the money calls and cover at lows and repeat the deal. this stock is swinging up and down in $48-$45 range recenlty
I just prefer selling out of the money rather than in the money calls. I think at 45 -46 Abt is at the lower part of its trading range and I'd probably would lose the stock if I sold calls at that price. 49 - 50 May calls I think are attractive because I don't think it can make 50 by May and I'll make a few more dollars on the stock it I lose it, or keep the option premium and repeat the process. You never know until it's done.