Ask Alan – Early Exercise of Covered Call Options

Ask Alan – Early Exercise of Covered Call Options

Sep 12, 2012 | Ask Alan

Alan answers a question from Scott of Los Angeles, CA. Scott asks, “At the beginning of a contract period you sell a $40 out-of-the-money call after purchasing the stock for $38. The stock goes up quickly within a few days with 25 days left in the period. Say...
Ask Alan – Early Exercise of Covered Call Options

Ask Alan – Low Open Interest & Large Bid Ask Spread

Aug 29, 2012 | Ask Alan

Alan answers a question coming from Karen of Marietta, GA. Karen writes… I recently purchased LivePerson, ticker symbol LPSN for $17.49. The $15 strike has a low open interest of 32 and a large, bid ask spread of $0.45. The $17.50 strike has a much larger open...
Ask Alan – Early Exercise of Covered Call Options

Ask Alan – Delta and Covered Call Writing

Aug 22, 2012 | Ask Alan

Alan answers a question coming from Andrew of Marblehead, MA. Andrew writes… "I was watching JP Morgan when it was trading at $33.75, and the August $34.00 call was at $0.93. After taking a phone call, the stock price was up $0.65 to $34.40, but the call...
Ask Alan – Early Exercise of Covered Call Options

Ask Alan – Calculating the Target Price of a Stock

Aug 19, 2012 | Ask Alan

Alan answers a question coming from Dana of Ocala, FL. Dana writes… "My friend said that to compute the target price for Apple Computer you should multiply it by the forward P/E ratio of 11.57 and the earnings per share of 44.16, and that will leave us with...
Ask Alan – Early Exercise of Covered Call Options

Ask Alan – When to Enter Your Covered Call Trades

Aug 15, 2012 | Ask Alan

Alan answers a question coming from Ron of Milwaukie, OR. Ron writes… "Will you enter a position when the market is in general decline, or when the futures are down and you know that the market will gap down at open? In other words, will you enter a...