Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1200  
Subject: Re: Stumbling Cub questions Date: 8/11/2002 2:57 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Eric,

You asked four questions. I'm a bit of a novice at options too; but let me try to answer your questions.

First, does the term "covered calls" refer to selling calls in stocks you already have in your portfolio? Yes.

Second, what are "married puts"? Married puts are puts you sell against short positions in your account. It's the reciprocal of a covered call. Not every broker that offers options offers married puts.

Third, how are the premiums from selling puts taxed? If stocks are "put to you" is the strike price your basis for tax purposes? Yes, the difference between the strike and sale price minus any premium you paid is your income/loss. If I'm not mistaken though, gains or losses from the sale of options are treated as short-term, unless it results in the disposal of an equivilant number of shares from your account -- in which case, it depends on the original purchase/sale date of those shares. Also, if you exercise a call and hold the resulting position long enough, the sale of those shares may be considered long-term; but the clock doesn't start until you actually acquire the shares and doesn't end until you actually sell them. The time spent holding the option contract doesn't count.

Fourth, and last question for now, what is an option chain? According to Investopia ( http://www.investopedia.com/terms/o/optionchain.asp ), an option chain is simply, A way of quoting options prices through a list of all of the options for a given security, including the various strike prices, expiration dates, and whether they are calls or puts. Your broker should be able to provide you the option chain for a given security. If not, you can try Yahoo ( http://biz.yahoo.com/opt/ ), the AMEX ( http://www.amex.com ) or the Chicago Board of Options Exchange ( http://quote.cboe.com/QuoteTable.asp ).

Hope that helps.

- Joel


Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next

Announcements

2013 Feste Award Voting Begins!
Who will win the 2013 Feste Award? Vote now for the Fool that most exemplifies the Fool Community mission of Learning Together!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Tax Strategies

TMFPMarti-Feeling Good
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement