How To Write Covered Calls - An Ongoing Real Case Study! Message Board

To: Herman J. Matos who started this subject	12/3/2003 6:02:16 AM
From: daryll40	Read Replies (4) of 14162

I am new here and need some help! I currently own 3000 shares of National City Bank, (NCC) and have owned them for years and years...so my basis is very low compared to today's $34 price. From a tax perspetive, I cannot have the stock called. That being said, I decided to "play" with covered calls and wrote 10 calls against 1000 shares in October. At the time, the stock was at $31.50 and I received 75 cents per share for 1000 shares on the January 32.5 calls. Needless to say, the stock is now near $34 so I am about $750 underwater to my breakeven point of $33.25 ($32.50 strike price plus .75 premium received). What should I do? Sit tight until January, and see if it pulls back? Roll out to April, paying out $1.85 per share to buy back the Jan calls and taking in $2.30 per share in selling the April 32.5? What would you folks do? Daryll40