Replies to post #242289 on InterDigital Inc (IDCC)

[nicmar]

Right olddog, no sure thing and thanks for the link. .. nic

[Ghors]

Olddog: Pretty good article.

My original mentor stressed that most options expire worthless about 80 -84% of the time. He felt that covered calls were the safest of the options. He taught you can make guaranteed money on a stock by selling a covered call. By guaranteed, I mean the option money is deposited to your account and you never lose that money. True, you can lose the stock and difference in the option proceeds and the increased stock price if the stock goes up significantly. You can also lose value on the underlying stock if the price of the stock goes down. (you lose the same amount in a buy and hold practice) But, if the stock price stays below the strike price of the option, the option expires worthless and you can resell it again at the same or different strike price. You can also buy the option back if facts change and you think the price of the stock will jump and/or you can roll up to a higher strike price.

I personally use the strategy (along with selling puts) when I don't want to be invested in a stock long term, but am just trying to make a nice percentage return on the underlying stock purchase.

As to IDCC, i would not sell covered calls or naked calls as I believe we are near a rapid rise in value and I don't want to miss out after 10 years of being a stockholder. I have sold January puts as this is generally considered bullish. (the bet is the stock price will go up and the put will expire worthless)

I rarely sell uncovered calls as the risk of loss is high. I don't short and I wouldn't have a clue how to manipulate a stock on expiration day to a desired number. I also can't prove how hedge funds and market makers work or how they can illegally manipulate a stock by selling calls or puts or buying same. I am not that smart.

So, as an investor, I guess it all depends on whether you have bought a stock to hold until death do you part or if you are just trying to make money and play for the juice.

I hold IDCC until death do us part or 100, 200 or so. LOL I also don't advise playing options unless you spend the time to learn how it works or unless you work closely with an advisor who understands options. I would also not trust anyone to manage my stock accounts and play options without my concurrence or consent.

IMO g hors