Covered Calls, what would you do?

Discussion in 'Options' started by ryanturri, Mar 24, 2008.

  1. So, because of my work I have a 30 day minimum hold. I own 5,500 shares of SIRI and last Thursday I wrote 30 contracts of the April 08 3 dollar calls (not expecting the DOJ to make a decision until summer). Since then, Siri has moved up over 10%, I'm locked in with these Calls and since the DOJ approved the merger, I doubt it's going back to below 3 dollars. I can't buy my calls back, nor can I deal with any more April 08 options, I have to go out to May. What would you do in this situation?
  2. The deal still needs FCC approval, which isn't a sure thing. It might take until the summer for it to close.
  3. DennisR


    i would just hold what you have. You still have 2500 shares that you haven't capped the profit on by writing calls. like you said I doub't you're going below 3 at this point. It would have been nice to unload after today's news but you're not really in bad shape. worst case would be getting exercised and then falling back down. If you're really worried you can probably sell puts on XM if you're allowed. They should trade together until the deal is sealed.

    *disclaimer- I don't know what i'm talking about*