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Re: Drexion2004 post# 12638

Friday, 11/20/2009 1:47:41 AM

Friday, November 20, 2009 1:47:41 AM

Post# of 94785
NEP $2.5 calls: Yes I see the time premium is low.

My plan was to hold the stock for at least a year and a day for lower cap gains.
You will pay short term cap gains on your profit though right? So I take it that you feel that the higher tax hit is an acceptable cost vs holding the underlying for over a year? Will you be reentering the position after you close the calls or are you planning to exercise the options at expiration? Just curious as I tend to just buy the underlying if it is cheap enough and would like to know if I should change my strategy to look at option plays for low priced stocks more often.

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